BNZ – BusinessNZ
Performance of
Manufacturing
Index

Holiday lull – PMI

15 Feb, 2019
53.1
January
-1.7

Monthly Change

expanding
slower rate

New Zealand’s manufacturing sector experienced a lower level of expansion for the first month of 2019, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for January was 53.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was 1.7 points down from December, and below the long term average of 53.4 for the survey.

BusinessNZ’s executive director for manufacturing Catherine Beard said that while the January result looked fairly similar to the results in 2018, there were aspects of it that will need to be watched in future months. 

Looking at the main sub-index values, new orders (52.2) decreased its level of expansion for a third consecutive month, with the latest result the lowest since December 2017.  

In addition, the proportion of positive comments for January (47.7%) was down considerably from December (60.6%) and November (60.1%).  However, seasonal factors such as Christmas and summer holidays were evident throughout the comments.  There were also a number who mentioned a softening of customer orders and market conditions.  

BNZ Senior Economist, Doug Steel said that “looking beyond the steady headline reading, the details of this month’s survey do raise some questions about the durability and pace of the current expansion”.

Catherine Beard

Catherine Beard

Director, Advocacy BusinessNZ

BNZ - BusinessNZ PMI

Time Series Data

View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PMI

Manufacturing Snapshot

All fine on the surface

At face value, January’s Performance of Manufacturing Index (PMI) looks reasonable enough at 53.1. Sure it is down a nudge from December’s 54.8, but it is still in touch with 2018’s average of 53.8. Indeed, it is quite close to its long term average of 53.4.
Read more

But some questions underneath

Looking beyond the steady headline reading, the details of this month’s survey do raise some questions about the durability and pace of the current expansion. A pullback in the production index is the most obvious one.
Read more

Employment

One reason to not get too downbeat on the slower demand components in the PMI is the solidity of its employment index.
Read more

World worries

World risks have been on the radar for some time. US-China trade tensions, China’s slowdown, Australia’s house price downturn, and Europe’s stalling growth are among many areas to watch. No surprise to see slower PMIs in these areas.
Read more

Doug Steel

Doug Steel

Senior Economist, BNZ

Sponsor Statement

BNZ is delighted to be associated with the Performance of Manufacturing Index (PMI) and BusinessNZ.

This association brings together the significant experience of leading business advocacy body BusinessNZ, and business finance specialist BNZ.

We look forward to continuing our association with BusinessNZ and associated regional organisations, and to playing our part in the ongoing development of the New Zealand manufacturing sector.

PMI Time Series Table

The results are seasonally adjusted.

National Indicies Jan
2018
Sep
2018
Oct
2018
Nov
2018
Dec
2018
Jan
2019
BNZ – BusinessNZ PMI 55.8 52.0 53.6 53.5 54.8 53.1
Production 56.0 50.1 53.0 51.6 54.9 51.1
Employment 52.7 50.8 52.3 51.2 52.2 52.2
New Orders 56.9 53.0 56.9 56.0 55.2 52.2
Finished Stocks 53.1 53.1 53.4 54.8 59.0 54.8
Deliveries 55.2 52.5 50.9 53.1 58.6 53.8

BNZ – BusinessNZ PMI Time Series

January 2018 – January 2022

International Results

J.P. Morgan Global Manufacturing PMITM

01 Feb 2019
50.7

About the PMI

The BNZ – BusinessNZ Performance of Manufacturing Index is a monthly survey of the manufacturing sector providing an early indicator of activity levels.

A PMI reading above 50 points indicates manufacturing activity is expanding; below 50 indicates it is contracting.

The main PMI and sub-index results are seasonally adjusted.

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Our Contributors

The BNZ – BusinessNZ PMI contains data obtained through BusinessNZ’s regional organisations