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New Zealand’s BusinessNZ Performance of Services Index (PSI) dropped to 47.5 in August 2025 from 48.9 in July, staying well below the long-term average of 52.9 and extending its contraction streak to 18 months. Among the sub-indexes, both Activity/Sales (46.2) and New Orders/Business (47.8) weakened further from July, while Employment (48.3) improved slightly but remained in persistent decline. The share of negative comments rose to 59.6% in August from 58.5% in July, though lower than June’s 66.2%. Service providers highlighted ongoing pressures from inflation, elevated interest rates, cost-of-living strains, and weak consumer sentiment, which continued to dampen demand. Additional headwinds cited included seasonal slowdowns, rising input costs, supply chain disruptions, and uncertainty surrounding government policy.