New Zealand’s manufacturing sector remained at healthy levels of expansion for May, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for May was 58.6 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 0.3 points higher than April.
BusinessNZ’s executive director for manufacturing Catherine Beard said that “the two major sub-index values of Production (65.3) and New Orders (63.7) remain the cornerstones of ongoing expansion in the sector. In contrast, Employment (51.5) continues to slip into lower expansion, while Finished Stocks (52.4) and Deliveries of Raw Materials (53.5) remain above the 50-point mark.”
“Globally, manufacturing activity continues to expand at a robust pace, culminating in an 11-year high for May. However, this has led to upwards pressure on input prices across most countries, including New Zealand, given comments from respondents outlining increased costs of raw materials.”
BNZ Senior Economist, Craig Ebert stated that “the PMI readings on Finished Stocks and Deliveries of Raw Materials for May appeared reasonable. However, they were also still clearly lagging as components in the PMI. If there was any doubt about supply-side factors being a major problem, this was put paid to by respondents’ comments to May’s PMI.”
