BNZ – BusinessNZ
Performance of
Manufacturing
Index

New orders keep manufacturing activity on right track – PMI

11 Feb, 2010

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

The seasonally adjusted PMI for January was 52. Although this was down one point from December, the last 5 months have seen general expansion.

A PMI reading above 50 indicates that manufacturing is generally expanding; below 50 that it is declining. PMI values for January in the years 2002-2009 ranged between 42 and 56, with an average score for the previous January results of 52.6.

BusinessNZ Executive Director for Manufacturing Catherine Beard said New Zealand manufacturers were in a better position than a year ago, when the PMI was entrenched in negative territory.

“After five months of solid – if unspectacular – expansion we have now reached a phase where monthly results are consistent and new orders continue to drive activity. Comments from manufacturers surveyed for the PMI highlight increased offshore orders as a key catalyst for improved activity, Ms Beard said.

“However, employment within the manufacturing sector remains stubbornly stuck in contraction. Employment is usually the last indicator to turn around once new orders and production begin to pick up.”

BNZ Economist Doug Steel said the combination of strong new orders and lower inventories was a positive sign.

“This is consistent with our expectation of a wider economic recovery developing through 2010,” Mr Steel said.

“Ongoing economic growth in Australia and a favourable cross exchange rate are positives, while there are uncertainties and risks elsewhere in the world, including Europe.”

Three of the five PMI indexes were in contraction during January however the two key indexes production (52.3) and new orders (56.2) remained in expansionary mode.

Employment (49.6) and deliveries of raw materials (49.3) remained just under the level of no change. Stocks of finished products (46.9) remained the lowest indicator, with 13 consecutive months in contraction.

While the overall seasonally adjusted result was in expansion, the unadjusted results showed all regions in decline during January. The biggest drop was in the Northern region (45.8), which had shown the strongest level of regional expansion for the previous two months. The Canterbury/Westland region (49.7) experienced a slight decline, while the Central (48.9) and Otago/Southland (48.8) regions displayed almost identical levels of activity.

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

For media comment: Stephanie Moakes, ph 04 496 6554, or 021 959 831
Craig Ebert, ph 04 474 6799

BNZ - BusinessNZ PMI

Time Series Data

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

Manufacturing Snapshot

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.

BNZ – BusinessNZ PMI Time Series

January 1966 – January 1970

International Results

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