July’s services sector expansion slows slightly, with weak hiring and supplier deliveries signaling a fragile recovery ahead of RBNZ policy decisions.
New Zealand’s services sector expanded for a second consecutive month in July, though the Performance of Services Index (PSI) eased to 50.6 from June’s 50.9. The reading remains above the breakeven 50 mark but reflects tepid momentum, with employment sub-indexes still contractionary at 48.5.
The prior month’s PSI stood at 50.9, following a rebound from May’s 48.1. While new orders and inventories showed modest strength, respondent comments highlighted cost pressures, fuel prices, and election uncertainty, with 64% of feedback negative.
NZD traders are likely to downplay the marginal decline, focusing instead on persistent hiring weakness and cautious consumer sentiment, which may support RBNZ easing expectations later in the cycle.