BNZ – BusinessNZ
Performance of
Manufacturing
Index

Road to recovery – PMI

12 Jun, 2020
39.7
May
+13.8

Monthly Change

contracting
slower rate

New Zealand’s manufacturing sector showed some signs of recovery, albeit off a very low base, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for May was 39.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was up 13.8 points from April, and higher than the level of activity recorded in March.

BusinessNZ’s executive director for manufacturing Catherine Beard said that given half of May was at alert level 2, this provided firms with a greater ability to boost production and new orders, which was seen in those two sub-indices showing the strongest increases from the previous month (sitting at 38.4 and 40.0 respectively).  In contrast, employment (39.4) took another hit.  With the wage subsidy to end soon for many businesses, a soft employment result in the months ahead may make the road to recovery that bit longer. 

“Looking at comments, the lift in overall activity levels also saw the proportion of positive comments increase from 10.3% in April to 28.5% in May.”  

BNZ Senior Economist, Craig Ebert said that “still, a negative tone remains evident in the fact that, even with its bounce in May, the NZ PMI merely got back to the sort of levels in sank to during the 2008/09 recession.”

Catherine Beard

Catherine Beard

Director, Advocacy BusinessNZ

BNZ - BusinessNZ PMI

Time Series Data

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

Manufacturing Snapshot

The PMI

New Zealand’s Performance of Manufacturing Index (PMI) posted a rebound, of sorts, in May. At a seasonally adjusted 39.7 it was still clearly contracting, just not to the extent it was in April, when it was 25.9. That result for April, of course, traversed the most extreme period of lockdown, related to COVID-19.
Read more

Variation in the Details

Despite its headline improvement, there was patent variation in the component detail of May’s PMI. By industry, there was a strong theme of primary industry support, with Food, Beverage & Tobacco up at 52.5, Wood and Paper bouncing to 54.5 (from 16.3 in April) and Petroleum, Chemical & Coal up to 52.8 – all unadjusted figures.
Read more

Looking Ahead

This is not normally the forum to talk about the outlook for manufacturing, as the PMI reports on what is happening rather than what firms expect to happen. However, with New Zealand moving down to restriction level-1 on 8 June, there is clearly potential for a bit more spark to show in the June/July results.
Read more

Employment

Perhaps this is why we’re seeing, from the PMI, signs of net job losses coming through already – despite the government’s enormous wage subsidy scheme directed at preserving jobs over the interim?
Read more

Craig Ebert

Craig Ebert

Senior Economist, BNZ

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.

National Indicies May
2019
Jan
2020
Feb
2020
Mar
2020
Apr
2020
May
2020
BNZ – BusinessNZ PMI 50.5 48.6 53.8 38.0 25.9 39.7
Production 47.9 48.7 54.5 31.2 19.1 38.4
Employment 49.0 46.7 51.1 44.8 41.1 39.4
New Orders 51.2 49.2 56.2 36.7 16.9 40.0
Finished Stocks 56.8 50.0 52.7 44.2 37.7 41.3
Deliveries 50.8 46.7 53.0 38.6 25.2 41.4

BNZ – BusinessNZ PMI Time Series

May 2020 – May 2024

International Results

J.P. Morgan Global Manufacturing PMITM

01 Jun 2020
42.4

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.

Technical Contact

Stephen Summers
Economist, BusinessNZ

[email protected]

PMI Releases

Lack of orders

Activity in New Zealand’s manufacturing sector experienced a drop in May and ongoing contraction of the sector, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for May was 47.2 (a PMI reading above 50.0...

To and Fro

Activity in New Zealand’s manufacturing sector experienced a pick up during April, although still remained in contraction, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for April was 48.9 (a PMI reading...

One step back

Activity in New Zealand’s manufacturing sector experienced stronger contraction during March, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for March was 47.1 (a PMI reading above 50.0 indicates that...

On the improve

Activity in New Zealand’s manufacturing sector continued to show improvement in February, but still remained in contraction, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for February was 49.3 (a PMI...

Stuck in low gear

Activity in New Zealand’s manufacturing sector improved in January, but still remained in contraction, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for January was 47.3 (a PMI reading above 50.0...

Our Contributors

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