Onwards and upwards – PMI
New Zealand’s manufacturing sector recorded its 11th consecutive month in expansion as activity in the sector rose during October, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for October was 55.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). The sector has now been in expansion for 11 consecutive months, and compared with previous October results the 2013 value was the highest since 2007. Overall, the PMI has averaged 56.0 since the start of 2013.
BusinessNZ’s executive director for manufacturing Catherine Beard said that after two consecutive dips in the level of expansion, the lift in October was welcome, and should mean a positive finish to the year.
“Given Christmas is fast approaching, positive results for the last two months of 2013 would mean it would be the first calendar year in which all 12 months are in positive territory since 2007. While one should never count their chickens, the overall sentiment of the business community and level of consumer confidence displayed in other surveys at present show that the country is on track for on-going growth for some time.”
BNZ Economist Doug Steel said the strong PMI result bodes well for economic growth through the latter part of 2013. “Moreover, the fact that all the PMI sub-components are above 50 suggests the economic expansion is broadening. It all adds up to upside risk to economic growth forecasts.”
All five seasonally adjusted main diffusion indices were in expansion for October, again led by new orders (60.4) which saw a return to a post-60 point value. Production (57.2) returned to similar levels of activity seen in August, while deliveries of raw materials (55.1) followed a similar pattern. Finished stocks (51.2) lifted up from its no change level in September, while employment (52.1) returned to expansion after a decline in activity the previous month.
Expansion was centered more towards the top and bottom parts of New Zealand during October. In the North Island, the Northern region (60.7) recorded its highest level of activity since November 2010. In contrast, the Central region (53.6) dropped 4.9 points from September. In the South Island, the Canterbury/Westland region (52.5) recovered from its slip in September, while the Otago-Southland region (58.0) returned to similar levels of activity seen in August.
For media comment: Catherine Beard 027 463 3212 or Doug Steel 04 474 6923