KPMG Financial Performance Index (KPMG FPI)

The KPMG FPI distills a range of market and financial performance indicators into a single index covering nearly 34,000 public companies around the world. The index scores companies on a scale of zero to 100, with zero indicating serious distress and 100 being best-performing.

Since many companies tend to perform well for most of their lifespans, there is a natural survivorship bias towards a higher quartile score. As such, around 80 percent of the companies in our index score between 85 and 99. As the KPMG FPI is a logit model, a drop below the average can very quickly lead to an index score of zero. Please refer to the full report for full details. 

The average KPMG FPI for companies headquartered in New Zealand has decreased (i.e. a decrease in financial corporate health) from 3Q23 to 4Q23 as monetary policy and global conditions continued to dampen the economy.

The average KPMG FPI score in New Zealand has decreased from 94.53 in 3Q23 to 93.54 in 4Q23. New Zealand’s FPI score has remained relatively stable (within 2.00 bps) over the last four quarters.

Two of the fifteen sectors included in the analysis experienced an increase in their KPMG FPI score from 3Q23 to 4Q23.

The sectors which experienced these increases, albeit small, were Business Services, and Infrastructure and Real Estate. This is likely due to the recovery of property prices from a trough in mid-2023, and public investment in infrastructure remaining high into most of 4Q23.

Food and Beverage and Manufacturing experienced the greatest decrease. Symptomatic of monetary tightening, higher unemployment paired with inflation further weakened consumer demand, affecting these sectors.

We have observed an increase in the number of Zombie companies (companies scoring 0 on the KPMG FPI for three or more consecutive quarters) from 3Q23 to 4Q23.

The global KPMG FPI score in 4Q23 was 91.20, an increase from 90.74 in 3Q23. This followed a decrease in the global FPI average from 2Q23 to 3Q23.

The New Zealand average FPI score has been above the global average for these periods, and has continued to be in 4Q23.

New Zealand experienced a decrease in FPI score (-101 bps) while the global KPMG FPI increased (46 bps).