New Zealand Services Shrink for 4th Month

New Zealand’s BusinessNZ Performance of Services Index declined to 47.5 in May 2026 from a downwardly revised 48.7 in April, marking the fourth consecutive month of contraction in the services sector as the Iran war weighed on business activity. All five of the other sub-indices remained in contraction territory, with activity/sales (44.7 vs 48.5) recording the steepest contraction, followed by stocks (47.5 vs 47.6), new orders (47.6 vs 50.9), employment (48.6 vs 48.5), and supplier deliveries (49.5 vs 46.8). “It is frustrating to see the services sector struggle, but it is difficult to see how the sector’s fortunes will turn around quickly. The industries within the sector that were weakest in May were those, like cafes & restaurants and recreational & personal services, that rely heavily on discretionary expenditure by consumers. People are still very wary of spending unless it cannot be avoided,” BusinessNZ CEO Katherine Rich said.

New Zealand’s BusinessNZ Performance of Services Index increased to 48.9 in April 2026 from an upwardly revised 46.2 in March, which was the lowest reading in 10 months, marking the third straight month of contraction in the services sector due to the impact of the Iran war. However, the latest reading was higher than March’s, with new orders expanding (51.2 vs 46.0). Meanwhile, all four of the other sub-indices remained in contraction territory, with supplier deliveries posting the weakest reading at 46.6 (vs 47.2). Activity/sales (48.9 vs 44.7), employment (48.5 vs 46.6), and stocks (47.6 vs 46.2) all improved, though they remained in negative territory. “ The jump in the headline index might be read as hope that the New Zealand economy is proving to be remarkably resilient to the war in the Middle East. On the other hand, it could be interpreted as further evidence that the economy is struggling to get its head above water.” BNZ’s Head of Research, Stephen Toplis, said.

New Zealand’s BusinessNZ Performance of Services Index dropped to 46.0 in March 2026 from a downwardly revised 47.6 in the previous month, marking the second straight month of contraction in services, due to the impact of the Iran war. The latest reading was also the lowest since May 2025, lower than the average of 52.8 over the history of the survey, as all sub-indexes deteriorated. Activity/sales (44.6 vs 47.5 in February), new orders (45.7 vs 48.8), employment (46.4 vs 47.0), and stocks (46.2 vs 46.5) all weakened. Meanwhile, the delivery times index edged down (47.3 vs 48.5), indicating the impact of the Middle East conflict. " The industries that deal mainly in discretionary spending (accommodation, cafes & restaurants; and cultural, recreational & personal services) have been especially impacted, and this is likely to reflect a lack of consumer confidence," BusinessNZ’s CEO, Katherine Rich, said.