Activity in New Zealand’s manufacturing sector picked up slightly in June, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for June was 51.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 0.9 points up from May, but still the fourth consecutive monthly result below the long-term average of 53.4 for the survey.
BusinessNZ’s executive director for manufacturing Catherine Beard said that while the sector avoided further deterioration in activity from May, there were still a number of concerns about manufacturing’s current state of play.
“The key sub-indexes of production (51.0) and new orders (52.8) recovered from May, which ensured the sector didn’t fall into contraction for June. However, employment (48.0) worsened to its lowest level since August 2016, while deliveries of raw materials (48.9) also fell into negative territory for the first time since December 2017, and its lowest result since September 2012.
The proportion of positive comments for June (42.9%) feel back markedly from May (54.3%). Soft and slow market activity tended to dominate negative comments, along with a fair degree of uncertainty present.
BNZ Senior Economist, Craig Ebert said that “the latest PMI might best be described as doing doggy paddle, with both ups and downs around some of the main PMI sub-index values”.