New Zealand's services sector returned to growth in December 2025, marking its first expansion since February 2024, according to a statement by BusinessNZ on Tuesday.

The BusinessNZ Performance of Services Index (PSI) rose to 51.5 in December 2025 from 47.2 in the previous month. A reading above the 50-point mark points to expansion.

"The December 2025 result ended the longest run of contraction for the sector since the survey began, stretching to 21 months," said Katherine Rich, BusinessNZ's chief executive.

The activity/sales indicator rose to 52.2 in December 2025 from 46.2 in November 2025, while the employment measure rose to 49.6 from 46.5. Stocks/inventories increased to 51.9 from 47.6, supplier deliveries rose to 49.7 from 48.8, and new orders/business increased to 52.5 from 49.6.

The share of negative comments in December 2025 was just over 50%, down from nearly 53% in November 2025, as the services sector faced weak demand, high costs, and holiday shutdowns, the report said.

Conversely, positive sentiment reflected seasonal demand, rising consumer confidence, stronger tourism, new contracts, and early signs of economic recovery, the report added.

Although the PSI is modest, its positive trend, combined with last week's jump in the Performance of Manufacturing Index, signals strong gross domestic product (GDP) growth through the end of 2025 and momentum into the new year, said Doug Steel, BusinessNZ's senior economist.

The seasonally adjusted BusinessNZ Performance of Composite Index showed both its GDP-weighted and free-weighted indices in expansion in December 2025 for the first time since January 2025, standing at 52.1 and 53.7, respectively.