Flat end to manufacturing year – PMI
New Zealand’s manufacturing sector year ended with a flat result, much as it had been throughout 2012, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for December was 50.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). While this was 1.3 points up from November, the PMI averaged a generally flat value of 50.9 over 2012.
BusinessNZ’s executive director for manufacturing Catherine Beard said that the December result was symptomatic of what manufacturers experienced in 2012.
“Five of the 12 months were in contraction, with only two months (February and May) showing any sufficient levels of expansion. However, despite the fairly unexciting result, comments by manufacturers remain more positive than negative, while we remain well ahead of where Australian manufacturing sits at present with all but two of their months in contraction. Also, the latest JPMorgan Global Manufacturing PMI for December (50.2) shows that what we are experiencing is really no different to other countries.
“2013 will most likely present similar challenges for many manufacturers, although the long awaited expectation of increased growth due to a slowly improving global economy, along with further upwards momentum in the Christchurch rebuild, should assist in driving up demand for products.”
BNZ economist Doug Steel said, “December looked a lot like 2012 as a whole for manufacturing – lots of ebb and flow. For every indicator that looked to be doing a bit better, there seemed to be another one slipping the other way. At least production-wise, there looks to have been enough over the past three months for manufacturing to make a positive contribution to Q4 GDP growth.”
Only one of the five seasonally adjusted main diffusion indices were in expansion for December, with production (52.5) recovering from a decline in November. However, the other key index of new orders (48.9) fell back into contraction. Finished stocks (48.8) also fell back into contraction after three months of continued improving results, while deliveries (49.9) were at all but no change. Employment (49.1) remained in a tight contraction band that has now lasted for four consecutive months.
While all regions experienced a fall in unadjusted activity over December, the drop was more prominent in the North Island. The Northern region (48.4) fell 8.2 points, while the Central region (46.3) fell 5.4 points to be both in contraction for the first time since April 2012. In contrast, both regions in the South Island remained in expansion. The Otago-Southland region (60.0) fell 5.0 points from November, while the Canterbury/Westland region (53.4) dropped 8.6 points.
For media comment: Catherine Beard 027 463 3212 or 04 496 6560 or Doug Steel 04 474 6923