New Zealand services sector shows modest growth while job gains remain weak

New Zealand's services sector recorded its third consecutive month of expansion in August, with the BNZ-BusinessNZ Performance of Services Index climbing to 51.2, the highest level since September 2023 and matching the December 2025 peak. The index, which gauges activity in the economy's largest sector, still lagged behind its long-term average of 52.7. New orders and overall business activity rose to 55.2, suggesting rising demand, but the employment component slipped to 49.4, showing a decline in staffing levels.

BusinessNZ chief executive Katherine Rich described the trend as promising but warned that three of five sub-indices remain in contraction. BNZ senior economist Doug Steel highlighted that export-linked services such as transport and storage performed best, while consumer-facing areas like accommodation and restaurants stayed weak, and he cautioned that higher oil prices could pressure household budgets.