New Zealand’s level of manufacturing expansion experienced a boost in April, according to the BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for April was 58.9 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 5.8 points higher than March, and the highest level of expansion since January 2016.
BusinessNZ’s executive director for manufacturing Catherine Beard said that the sizeable pick up in expansion is welcome, especially given the overall activity results for the past four months.
“The fact that the sub-indexes of production, new orders and deliveries of raw materials were all around the 60-point mark helped the overall result. Also, the proportion of positive comments in April (58.5%) has continued its upwards trajectory compared with March (55.1%), February (51.4%) and January (50.7%). Those who provided positive comments typically noted a lift in construction, as well as a pick-up in offshore orders.”
“Although April represents a good result for the sector, the key will be to continue the expansion momentum over the coming months.”
BNZ Senior Economist, Doug Steel said that “it’s a move from so-so to outright strong. Of course, we wouldn’t want to over interpret one month’s result especially as it may have been, in part, artificially boosted by the timing of Easter. But, in the least, April’s result suggests the economy has not fallen off the rails”.