New Zealand’s manufacturing sector showed increased expansion during October, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for October was 51.4 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.3 points higher than September, but still below the average of 52.4 since the survey began.
BusinessNZ’s Director of Advocacy, Catherine Beard, said that after two months of flatlining activity in the sector, at least October showed more signs of life.
“Four of the five sub-index values were in expansion during October, lead by New Orders (54.9), which showed its highest level of expansion since August 2022. This was followed by Production (52.0) and Finished Stocks (51.3). In contrast, Employment (48.1) remained in contraction, which has now been the case for six consecutive months”.
The proportion of negative comments from respondents stood at 54.1% for October, down from 60.2% in September and 58.1% in August. Manufacturers reported a lift in orders and improved demand, helped by seasonal activity, new customers/products, and signs of economic confidence returning. Many also noted better efficiency and productivity, with process improvements and automation supporting stronger sales and output.
BNZ’s Senior Economist Doug Steel said that “the lift to 51.4 from September’s 50.1 isn’t large, but it has moved the right way. The October result sees the PMI now boasting four consecutive months above the breakeven 50 mark for the second time in three years”.
