New Zealand Services Growth Slows in July

New Zealand’s BusinessNZ Performance of Services Index decreased to 50.6 in July 2026 from 50.9 in June, marking the second expansion in the services sector since December 2025. Two of the five sub-indices remained in expansion territory, with new orders (52.6 vs 53.3) recording the strongest reading, although at a softer pace, followed by stocks (51.6 vs 50.3) and activity/sales, which rebounded (50.5 vs 49.7). Meanwhile, contractions were seen in supplier deliveries (48.5 vs 51.2) and employment (48.5 vs 48.8). The latest reading highlighted that cost-of-living pressures, fuel and petrol prices, and rising interest rates remain front of mind for many, with a number also citing uncertainty ahead of the election. Sentiment was notably softer than in manufacturing, with 64% of comments negative.

New Zealand’s BusinessNZ Performance of Services Index rose to 50.6 in June 2026 from an upwardly revised 48.0 in May, marking the first expansion in the services sector since January. Two of the five sub-indices returned to expansion territory, with new orders (53.0 vs 48.2) recording the strongest growth, followed by supplier deliveries (51.2 vs 49.8). The remaining sub-indices stayed in contraction territory, although at a slower pace: activity/sales (49.3 vs 45.1), stocks (49.9 vs47.8), and employment (48.8 vs 48.7). " The recovery is tentative. The parts of the sector doing it hardest remain those most exposed to discretionary spending, like hospitality and personal services, where households are still holding onto their money for fuel, food and other essentials. A return to sustained growth depends on consumer confidence rebuilding, and that is unlikely while cost-of-living pressures remain this prominent,” said BusinessNZ’s CEO, Katherine Rich.

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.