Activity in New Zealand’s manufacturing sector improved during November, but still remained in contraction, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for November was 46.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was up from 42.9 in October, and the highest level of activity since June. However, the November result still showed the sector to be contraction, and represented the ninth consecutive monthly result below the 50.0 mark.
BusinessNZ’s Director, Advocacy Catherine Beard said that while the November result halted a five month run of worsening levels of decline, there is still work to be done to get the sector back into expansion.
“The key sub index measure of Production (43.6) remains stubbornly low, while New Orders (47.7) showed some improvement compared to previous months. Employment (47.9) also showed a relative improvement, while Finished Stocks (50.7) managed to revert back to expansion after a dip in October”.
The proportion of negative comments stood at 58.7%, which was down from 65.1% in October and 68.8% in September. A general lack of demand and sales was the overriding theme mentioned by many manufacturers.
BNZ Senior Economist, Craig Ebert stated that “at the heart of the recent poor run in the PMI has been its production index. While this improved a bit in November, it was, at 43.6, almost 10 index points south of its long-term average. That’s a big undershoot, in historical context”.
