Expansion in New Zealand’s manufacturing sector lifted again in July to record its second highest result, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for July was 62.6 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.7 points higher than June, and only below the 63.6 recorded in March over the history of the survey.
BusinessNZ’s executive director for manufacturing Catherine Beard said that “this was the third time in five months that the PMI posted a result over 60.0. While the key sub-index values of Production (66.0) and New Orders (65.0) both showed further expansion from June, Employment (58.3) recorded its highest ever result over the history of the survey.”
“Despite the second highest result for overall activity, the proportion of negative comments (51.4%) still remained higher than positive ones (48.6%). Increased orders – both domestically and overseas – was the most common factor for those who outlined positive comments. In contrast, the increasingly tight labour market was mentioned by many manufacturers who provided negative comments. Supply chain issues and raw material costs were also outlined as problematic.”
BNZ Senior Economist, Craig Ebert stated that “while New Zealand’s PMI is doing exceptionally well, we are also conscious of the headwinds happening for global manufacturing. This is on account of the resurgence of COVID19 in its delta strain.”
