FX.co ★ New Zealand Services Sector Contracts for 2nd Month

In March 2025, New Zealand's services sector experienced a contraction for the second month in a row. The BusinessNZ Performance of Services Index (PSI) edged up to 49.1 from February's 49.0, remaining below the neutral threshold of 50 and the long-term average of 53. BusinessNZ CEO Katherine Rich highlighted that the sector had briefly shown modest expansion in January before slipping back into contraction. Examining the sub-indices, Activity/Sales dropped to 47.4, whereas New Orders/Business increased to 50.8, marking its highest level since February 2024. Employment improved slightly, reaching 50.2, thereby ending a 15-month period of contraction. The percentage of comments reflecting negative business sentiment decreased, with 56.7% of March's comments expressing concern, compared to 57.8% in February. Key challenges included economic uncertainty, elevated interest rates, inflation, and subdued consumer confidence, coupled with global tariffs, rising costs, and seasonal or weather-related effects.