According to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI), New Zealand’s manufacturing sector was expanding in April, but the expansion was only marginal.

The seasonally adjusted PMI for April was 50.5 (where a reading above 50.0 indicates that the manufacturing sector as a whole is expanding, and a reading below 50.0 indicates a contraction). This was down from 52.8 in March and 54.6 in February. The long-term average for the index is 52.5.

BusinessNZ’s Director of Advocacy, Catherine Beard said: ” The proportion of respondents highlighting negative influences on their business performance was 63.6%, compared to 62.0% in March. And many of the comments focused on the effect of the war against Iran on freight and fuel costs, as well as its impact on deliveries of raw materials.”

The strongest sub-index was Employment, at 53.4. The Production levels sub-index was 51.7, while the Stocks of Finished Products sub-index was 50.5. Of concern for future results, the other two sub-indexes were in contraction, with New Orders at 48.2 and Deliveries of Raw Materials sub-index was 46.5.

Micro-firms (i.e. those with 1-10 employees) are clearly finding it hard going, with a sub-index level of only 39.2. However, the sub-indexes for respondents in each of the other size groups were all above 50.0, with Medium-Large firms (51-100 employees) strongest, at 56.8.

BNZ Head of Research, Stephen Toplis, said “The Performance of Manufacturing Index had been remarkably robust with the headline reading for March down on previous months but still solidly above the breakeven line. However, we feared it was only a matter of time before the wheels started to fall off and, alas, the April survey indicates that time may now have arrived.”