FX.co ★ New Zealand Services PMI Drops to 11-Month Low

New Zealand's BusinessNZ Performance of Services Index experienced a significant decline in May 2025, dropping to 44.0 from 48.1 in April. This marks its lowest reading since June 2024 and represents the fourth consecutive month of contraction. The index remains well below its long-term average of 53.0. Among its sub-indices, both Activity/Sales and New Orders/Business plummeted to levels not seen since last June, with readings of 40.1 and 43.2, respectively. Employment further contracted, falling to 47.2, while Deliveries held steady at 45.7. Furthermore, negative sentiment intensified, as 65.6% of comments in May reflected pessimism, up from 61.8% in April and 56.7% in March. Businesses attributed the downturn to decreased demand and declining revenues, primarily due to rising costs, economic uncertainty, and weak consumer confidence. Many businesses observed customers reducing their spending, postponing decisions, and responding cautiously to inflation, interest rates, and broader market volatility.