According to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI), New Zealand’s manufacturing sector continued to expand in October, though at a slower rate than the previous month.
The seasonally adjusted PMI for October was 54.9 (where a reading above 50.0 indicates that the manufacturing sector as a whole is expanding, and a reading below 50.0 indicates a contraction). This was down 1.4 points from 56.3 in September and continues the 16 month streak in expansion.
BusinessNZ’s Director of Advocacy, Catherine Beard said: “It’s pleasing to see manufacturing continue to expand for well over a year now, even as the pace eases back from September’s strong result. The softening in New Orders and Production is worth keeping an eye on, but the Christmas build-up and steady infrastructure work suggest manufacturers are heading into the end of the year on a solid footing, even with input prices and the cost of living still weighing on many.”
Sentiment softened slighting this month, with 56.4% of comments being negative, up from 53% in September. Respondents pointed to fuel prices, cost of living and election uncertainty, though a good number cited the Christmas build-up and steady orders as a more positive note.
Employment was the weakest sub-index at 51.9, though still in expansion, while Deliveries (61.4) and Finished Stocks (58.0) led the pack. New Orders (54.3) and Production (53.9) eased from last month but remained comfortably in expansion.
BNZ Senior Economist, Doug Steel, said “Although the PMI can be volatile month to month, the broader message is clear: momentum in manufacturing is firmly positive.”
