New Zealand’s manufacturing sector displayed expansion for the first time since June, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for October was 52.6 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was the highest level of activity since April 2019.
BusinessNZ’s executive director for manufacturing Catherine Beard said that the October result was a welcome change from three consecutive months in contraction.
“The sub-index of new orders (56.2) continued its recovery to record its highest value since May 2018, while production (52.6) produced its highest result since February 2019. Employment (50.2) was all but unchanged from the previous month, while finished stocks (48.5) was the only sub-index to remain in contraction for October, as well as at its lowest level since February 2014.
“After a five month period of both lacklustre and negative growth, the pick-up in both new orders and production put the sector back on track. If the remaining two months for 2019 are to keep up the momentum, it is important these key sub-indexes remain positive to finish the year on a more upbeat note.
Given the pick-up in activity, the proportion of positive comments for October (57.6%) was higher than September (48.8%). A number mentioned seasonal factors influencing activity, as well as some outlining a general market increase.
BNZ Senior Economist, Doug Steel said that “the October PMI is hardly what you would call strong. But it is certainly much better than the previous three months where the index languished below 50 which indicated a sector going backwards”.