BNZ – BusinessNZ
Performance of
Manufacturing
Index

Manufacturing expansion gains further foothold in February – PMI

11 Mar, 2010

Ongoing strength in new orders meant manufacturing remained in positive territory for the second month of 2010, according to the BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for February stood at 53.3. This was up 1.2 points from January, showing slow but steady improvement.

A PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining.

BusinessNZ’s executive director for manufacturing Catherine Beard said while New Zealand manufacturers were still making more cautious comments than positive in the survey feedback, the continued increase in new order numbers was encouraging as was the fact that all the diffusion indices, including employment, were now in positive territory.

“After six months of solid, if not spectacular expansion, we have now reached a phase where monthly results are consistent, and new orders continue to drive activity, which we would hope will flow through to increasing employment if the trend continues.”

BNZ Head of Research Stephen Toplis said the latest data support the optimism of last month’s PMI and the bank’s belief that the broader economic environment is improving.

“The future is looking brighter for manufacturers’ supply into the domestic market.  At face value, household spending seems like one of the weaker links, but we believe it’s on a slow trend improvement as stock-to-sales ratios continue to decline.

“Residential construction is also on the improve, largely driven by strong net migration inflows. However there is no evidence that non-residential will follow suit.

“But the really positive news for manufacturers continues to come from the export sector, with dairy, wood and fuel exporters doing particularly well. Our trading partner growth, heavily influenced by Asia and Australia is expected to show relatively strong expansion over the next three years.”

In terms of regional performance, the unadjusted results show all regions in decline, apart from Canterbury (59.2), which is taking the lead with an increased expansion of 9.5 points ahead of last month. 

The category of manufacturing sub groups that were in expansion in February included metal product manufacturing (54.9), machinery and equipment manufacturing (52.4), with employment in the metal product manufacturing category also in expansion.

Click here to view the February PMI
Click here to view the PMI time series data

For media comment:
Catherine Beard ph: 04 496 6560 or 0274 633 212
Stephen Toplis ph: 04 474 6905

BNZ - BusinessNZ PMI

Time Series Data

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

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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.

BNZ – BusinessNZ PMI Time Series

January 1966 – January 1970

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J.P. Morgan Global Manufacturing PMITM

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