New Zealand’s manufacturing sector rose back into expansion for July, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for July was 52.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2.7 points higher than June, but still below the long-term average of 53.1 for the survey.
BusinessNZ’s Director, Advocacy Catherine Beard said that while a return to expansion in the sector was a positive step forward, the numbers behind the headline figure continue to show a sector stlll struggling to get traction.
“The key sub index values of Production (49.0) and New Orders (50.5) both improved from June, although the former was still in contraction. While Employment (52.6) rose 1.3 points from June, both Finished Stocks (49.4) and Deliveries (49.4) were in contraction.”
Also, manufacturers have continued to have a more negative mindset, with the July result showing 62.1% providing negative comments. Although this was down from 68.5% recorded in June, staff retention/shortages and supply chain issues continue to show a strong presence.
BNZ Senior Economist, Doug Steel stated that “despite the increase in July, the PMI remains shy of its long-term average of 53.1 as it has done so for four consecutive months now. Over that period, the PMI has also shown something of a saw-tooth pattern providing no clear sign of acceleration or deceleration.”