New Zealand’s manufacturing sector fell into contraction for the first time since 2012, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for July was 48.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2.9 points down from June, and the lowest overall result since August 2012.
BusinessNZ’s executive director for manufacturing Catherine Beard said that concerns around the direction of activity over the last six months has inevitably led to the sector falling into decline. nbsp;
“While the key sub-index of production (51.1) kept its head above water with a result matching the previous month, the other key sub-index of new orders (48.9) fell 3.5 points to its lowest result since December 2012. Worst still, employment (42.6) experienced its third consecutive decline to reach its lowest value since June 2009.
The proportion of positive comments for July (44.0%) remained the lesser of the two options, although not quite as bad as June (42.9%). A lack of orders and customer demand dominated the negative comments received, along with a general softening of markets.
BNZ Senior Economist, Craig Ebert said that “while July’s result is no dead-set that the economy at large is contracting, the shrinkage is certainly something to take note of”.
