Holding its own – PMI
Manufacturing activity continued to show healthy levels of expansion, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for March was 54.5 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 3.2 points down from February, but the second highest result since May 2011 and third highest since June 2010. For the first three months of 2012, the PMI has averaged 54.4, compared with 51.9 for the corresponding quarter in 2011.
BusinessNZ’s executive director for manufacturing Catherine Beard said that although the March result was lower than February, the result was still a step in the right direction for stronger growth in the sector.
“February’s main value was a welcome shot in the arm for the sector, while the March result ensured some further impetus as both new orders and production kept manufacturers busy. However, it is important to bear in mind that although some have experienced better conditions for business, others are still struggling. This is best shown via negative and positive comments from manufacturers mentioning offshore orders, with the former finding difficulty in the European market, and the later enjoying continued success with the Australian market.”
BNZ Economist Doug Steel remarked “March’s PMI result is a solid result. Although it didn’t quite live up to February’s humdinger, it represents positive momentum. These PMI results fit with our view that manufacturing made a decent positive contribution to overall Q1 GDP growth.”
Four of the five seasonally adjusted main diffusion indices were again in expansion during March, led by production (56.4) and new orders (56.2) with very similar levels of activity. Employment (52.3) inched upwards in March, while deliveries (52.0) fell 1.8 points from February. Finished stocks (49.1) experienced its third consecutive contraction.
Unadjusted results by region showed activity in various parts of the country broadly similar to the previous month. The Northern region (51.6) dropped 1.4 points but remained in expansion, as did the Canterbury/Westland region (50.4). The Central region (62.1) built on its strong showing in February, while the Otago/Southland region (48.8) improved from February but still in contraction.
For media comment: Catherine Beard, ph: 0274 633 212 or Doug Steel, ph: 04 474 6923.