New Zealand’s manufacturing sector experienced a slower rate of expansion in February, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for February was 56.0 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2 points down from January, although still the third highest level of activity over the last 12 months. The sector has now been in continued expansion since October 2012.
BusinessNZ’s executive director for manufacturing Catherine Beard said that while January’s sizzling result could not be built on, the level of expansion was still healthy in the sector for February. This was also supported by the fact that over two-thirds of comments remain positive.
“The other area of interest in the February result was the slight contraction in employment, which last occurred in December 2014. Given the other sub-indexes of new orders and production remain very healthy, it will be interesting to see how employment growth plays out in the months to come .”
BNZ Senior Economist Doug Steel said ‘We would be more concerned by the dip in the employment indicator this month if it were not for very strong new orders and ongoing underlying strength in broader spending indicators. Overall, the PMI remains robust.’