FX.co ★ New Zealand Services Downturn Persists

The BusinessNZ Performance of Services Index (PSI) for New Zealand observed a slight increase in October 2025, rising to 48.7 from 48.3 in September. However, the index has remained in contraction for 20 consecutive months and continues to sit below the long-term average of 52.8. Within the sub-index categories, Activity/Sales reached its peak since January 2025 with a reading of 48.9. Nevertheless, New Orders/Business saw a slight decline to 49.5 compared to September. The Employment sub-index improved to 48.8, marking its highest level since March 2025 after a 0.9-point increase. The percentage of negative comments dropped to 54.1% in October, down from 58.0% in September and 59.6% in August. Feedback from the sector consistently underscored challenges such as weak demand, reduced customer spending driven by a broader economic downturn, cost-of-living pressures, and diminished consumer confidence. Rising operational costs, delays, increasing competition, and project cancellations have further strained sales, decelerated activity, and intensified cash flow challenges.