BNZ economists today revised up their 2016 forecast for gross domestic product growth to 2.4 percent from a previous projection of 1.9 percent, on expectations for a bigger cycle in net immigration and the sharp rebound in the domestic growth indicators over recent months.
"December's PSI wasn't far off the eight-year high it posted in November of 59.8," BNZ senior economist Craig Ebert said in his report. "When we look at the overall PSI, over a longer stretch, it becomes clear that it's been picking up the pace for a good number of years now.
"Today's PSI, combined with the 14-month high we saw in last week's PMI, is suggestive of GDP (economic) growth in the range of 3-4 percent on an annual basis," Ebert said.
The services sector accounts for about two-thirds of the economy.
Across the PSI's sub-indices, activity decreased most in supplier deliveries, down 2.2 points to 55.4. Employment fell 1.5 points to 53.6 and stocks/inventories dropped 1.6 points to 55.3. Activity/sales recorded a reading of 62.1, down 0.3 of a point, and new orders/business was down 0.1 of a point to 64.3, still firmly in expansion mode.
BNZ's Ebert said the lead from new orders/business suggests current production strength can be sustained in early 2016, despite "solid rather than spectacular" numbers for job expansion.