New Zealand’s manufacturing expansion continued its downward trend, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for July was 51.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.5 points lower than June, and the third consecutive month where expansion has weakened.
BusinessNZ’s executive director for manufacturing Catherine Beard said that the July result produced a few red flags in terms of where the manufacturing sector currently sits.
“Production (49.0) experienced its lowest level of contraction since May 2015, while the unadjusted PMI was in slight contraction for the first time since January 2017. While employment (51.2) rose above the no change mark after two months of decline, new orders (52.6) displayed only minor to moderate expansion.
In addition, the proportion of positive comments (48.8%) was overtaken by the proportion of negative comments (51.3%) during July. Those who provided negative comments noted some seasonal factors at play, along with general customer demand slowing.
BNZ Senior Economist, Doug Steel said that “at this level, the PMI is hinting at more than just a slowdown in the manufacturing sector but outright slow growth”.