BNZ – BusinessNZ
Performance of
Manufacturing
Index

Lack of orders

14 Jun, 2024
47.2
May
-1.6

Monthly Change

Contracting
Faster Rate

Activity in New Zealand’s manufacturing sector experienced a drop in May and ongoing contraction of the sector, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for May was 47.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was down from 48.8 in April, and means the sector has now been in contraction for 15 consecutive months.

BusinessNZ’s Director, Advocacy Catherine Beard said that there was little in the May result to signal a positive turnaround in the sector is coming soon.

“The key sub-index result of New Orders (44.4) remains stubbornly in contraction, and a clear impediment to overall expansion in the sector. To put this into perspective, during the Global Financial Crisis of 2008/09 New Orders remained in contraction for 14 consecutive months. The current results are now a third more than that with New Orders now in contraction for 21 consecutive months. Production (44.5) reverted back to current trends after a surprise expansion in April, although Employment (50.6) did remain in expansion following the expansionary April result.

Despite the dip in the May result, the proportion of negative comments stood at 63.5%, which was down from 69% in April and 65% in March. The vast majority of negative comments focused on a general slowdown and the tough recessionary times at present”.

BNZ’s Senior Economist Doug Steel said that “PMI readings to date this year are consistent with falling manufacturing GDP. We anticipate next week’s Q1 GDP figures to include a contraction in the manufacturing component. The latest PMI indicators suggests Q2 will also be weak and potentially weaker than we already anticipate”.

Production
44.5
Employment
50.6
New Orders
44.4
Finished Stocks
52.4
Deliveries
45.2
46.3
51.6
50.2
45.5
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

Still no joy

Not since February last year has the Performance of Manufacturing Index (PMI) been above the breakeven 50 mark. There was still no joy in May this year, with the PMI easing to 47.2 from April’s 48.8. It marks 15 months of contraction.

Read more

Unhelpful mix of ups and downs

The only PMI sub index to lift in May was inventory. The combination of weak new orders and rising inventory is not a good look for production ahead.

Read more

Lower sales and output

Weak PMI new orders and production point to further declines in official measures of manufacturing sales and GDP. Last week Stats NZ’s data saw a 4.5% drop in core manufacturing sales volumes in the first quarter compared to a year ago.

Read more

Holding on

The PMI employment index at 50.6 is consistent with broadly flat employment in the sector. Since the PMI survey started in 2002, the difference between new orders and employment has never been more negative than now (besides during the first covid lockdown).

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 May 2023 Jan 2024 Feb 2024 Mar 2024 Apr 2024 May 2024
BNZ – BusinessNZ PMI 48.7 47.5 49.1 46.7 48.8 47.2
Production 46.4 43.0 49.2 45.8 50.3 44.5
Employment 48.9 50.9 49.4 46.8 50.9 50.6
New Orders 49.6 47.9 47.6 44.7 45.4 44.4
Finished Stocks 51.0 47.7 49.1 49.7 50.7 52.4
Deliveries 46.1 49.7 51.0 47.5 48.1 45.2

BNZ – BusinessNZ PMI Time Series

January 2019 – May 2024

International Results

J.P. Morgan Global Manufacturing PMITM

03 Jun 2024
50.9
USA
51.3
UK
51.2
Eurozone
47.3
China
51.7
Japan
50.4
Australia
49.7
NZ
47.2

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.

Technical Contact

Stephen Summers
Economist, BusinessNZ

[email protected]

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Activity in New Zealand’s manufacturing sector continued to show improvement in February, but still remained in contraction, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for February was 49.3 (a PMI...

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Activity in New Zealand’s manufacturing sector improved in January, but still remained in contraction, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for January was 47.3 (a PMI reading above 50.0...

Our Contributors

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