New Zealand’s manufacturing sector experienced a decline in activity during March, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for March was 48.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 3.6 points down from February, and well below the long-term average activity rate of 53.0.
BusinessNZ’s Director, Advocacy Catherine Beard said that the numbers behind the main March result showed the manufacturing sector facing some stiff headwinds ahead.
“Looking at the key sub-index values, Production (43.3) dropped to its lowest level of activity since the last nationwide lockdown in August 2021, while New Orders (46.7) fell back into contraction after expansion in February. Employment (47.1) dropped back to the same level as November 2022, while Finished Stocks (48.4) dropped 6.7 points from the previous month. Delivery of Raw Materials (53.8) bucked the trend with its third consecutive lift in expansion.
The drop in activity during March also saw the proportion of negative comments lift to 63.2%, compared with 60.2% in February and 69.9% for January. A general slow down and fall in demand were common threads in comments made.
BNZ Senior Economist, Craig Ebert stated that “disappointing as New Zealand’s March PMI was, it wasn’t especially negative in longer-term context. Neither was it much out of line with manufacturing readings across the world of late”.
