New Zealand Services Activity Tentatively Overcomes Global Shocks in June

By James Glynn

SYDNEY--Activity across New Zealand's services sector returned to expansion in June for the first time since January as the fuel price shock of earlier months showed some signs of easing.

The BNZ-BusinessNZ performance of services index for June was 50.6, up from 48.0 in May, and 48.9 in April. A reading above 50.0 indicates the sector is in expansion.

The improved result is consistent with the Reserve Bank of New Zealand's decision last week to start raising interest rates amid concerns that inflation threatens to remain elevated as the economy recovers.

"It is heartening to see the PSI edge back above 50.0 after such a prolonged stretch of contraction, though at 50.6 the recovery is tentative," BusinessNZ Chief Executive Katherine Rich said.

The parts of the services sector doing it hardest remain those most exposed to discretionary spending, like hospitality and personal services, where households are still holding on to their money for fuel, food and other essentials, the data showed.

"A return to sustained growth depends on consumer confidence rebuilding, and that is unlikely while cost-of-living pressures remain this prominent," Rich said.

New orders was the strongest sub-index, while deliveries also moved into expansion, according to the report. Inventories, sales and employment remained in contraction in June.

"The direction of travel is positive, but is hardly a spectacular number," said BNZ Head of Research Stephen Toplis. "Still, it's further confirmation that the trend in growth prior to the oil shock is resuming."

-Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

July 12, 2026 19:10 ET (23:10 GMT)