Key Takeaways
- New Zealand's services sector remains in contraction for the 20th consecutive month, with the Performance of Services Index (PSI) rising marginally to 48.7 in October from 48.3 in September, indicating persistent economic challenges.
- New Zealand's monthly food prices saw a slight decrease of 0.3% in October, following a 0.4% decline in September, though annual food price inflation remained elevated at 4.1% as of September 2025.
- Mining giant Rio Tinto (RIO) has paused its BioIron project for further development, instead partnering with Australian environmental technology company Calix (CXL) to test a new low-emissions steelmaking process (Zesty™) in Western Australia, with an investment exceeding A$35 million.
New Zealand's Economic Landscape: Services Sector Struggles Amid Easing Food Price Pressure
New Zealand's services sector continues to face headwinds, marking its 20th consecutive month in contraction. The Performance of Services Index (PSI) for October showed a minor improvement, rising to 48.7 from 48.3 in September. Despite this uptick, a reading below 50.0 signifies a contracting sector, underscoring ongoing economic challenges. Sub-components of the PSI, including activity/sales and new orders, remained below the breakeven 50 mark and their long-term averages, with new orders index at 49.5 and activity/sales at 48.9, its best since January 2025. Employment in the sector also rose to 48.8, its highest since March 2025.
Concurrently, New Zealand's food prices experienced a modest monthly decrease of 0.3% in October, building on a 0.4% decline in September. This offers some relief to consumers, though annual food price inflation remained significant at 4.1% in the 12 months to September 2025, the smallest annual increase since April. Key staples like white bread, cheese, butter, and milk have seen substantial annual price hikes, with white bread increasing by 49.6% and cheese by 31.4% year-on-year to September. Vegetables such as cabbage and lettuce also saw significant annual price increases, with cabbage nearly doubling in price.
Rio Tinto Shifts Green Steel Focus with Calix Partnership
In a strategic move towards decarbonization, global mining company Rio Tinto (RIO) has announced a pause in the development of its BioIron™ Research and Development Facility. The company stated that the current furnace design for BioIron requires additional development to minimize technical risks and optimize performance, though it remains committed to the technology's long-term potential. Research and development for BioIron will continue in partnership with the University of Nottingham and Metso.
Simultaneously, Rio Tinto has entered a Joint Development Agreement with Australian environmental technology company Calix (CXL) to support the construction of Calix's Zero Emissions Steel Technology (Zesty™) demonstration plant in Western Australia. This partnership aims to enable the use of Pilbara iron ores in lower-emissions steelmaking. Rio Tinto will invest over A$35 million (subject to project milestones) in the Zesty Green Iron Demonstration Plant, which will utilize electric heating and hydrogen reduction to produce reduced-emissions iron. The demonstration plant is slated for a site in Kwinana, previously earmarked for the BioIron facility. This initiative aligns with Rio Tinto's broader climate goals to reduce greenhouse gas emissions by 15% by 2025 and 50% by 2030, and to achieve net zero by 2050, as steelmaking accounts for nearly 70% of its Scope 3 emissions. The Zesty process is also notable for its compatibility with lower-grade iron ore.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.