New Zealand service PMI for May 43.0 (prior 46.6) … “Bottom of the Barrel”

New Zealand Performance of Services Index for May 2024, via BusiznessNZ. BusinessNZ headline their report with the dour: “Bottom of the Barrel”

• lowest for a non-COVID lockdown month since the survey began in 2007

BusinessNZ chief executive Kirk Hope:

• as bad as it can get for the sector, reaching contraction levels greater than during the Global Financial Crisis of 2008/09
• May result well below the long-term average of 53.3

BNZ’s Senior Economist Doug Steel:

• “the speed of decline is as worrisome as its size over the past three months. There is weak and then there is very weak. Overall, this tells of a services sector in reverse, at pace”.

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The bad news for that BusinessNZ “as bad as it can get” comment is that’s not necessarily true. They are probably correct, but still … persistent high rates in New Zealand are a heavy weight on the economy. A possible rate cut is perhaps near the end of the year or early 2025.

This article was written by Eamonn Sheridan at www.forexlive.com.