New Zealand’s manufacturing sector experienced a lower level of expansion during April, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for April was 51.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2.5 points lower than March, and the lowest monthly result since August 2021.
BusinessNZ’s Director, Advocacy Catherine Beard said that after steady expansionary results over recent months, the April result highlighted the fickle nature of what manufacturers are currently experiencing.
“In terms of the main sub-indices, New Orders (56.0) continued its positive stance, although Production (49.1) fell back into contraction. Employment (49.8) also contracted after two months of expansion, while Deliveries experienced its first level of contraction since November 2021.”
Manufacturers were in a more negative mindset during April, with the proportion of negative comments increasing from 64.2% in March to 70.3% in April. While COVID features strongly in discussion, skill/labour shortages and supply chain disruptions are also prevalent.
BNZ Senior Economist, Craig Ebert stated that “supply problems certainly featured extensively in respondents’ comments, including inferences that COVID, and related absenteeism, remains a big issue, even with recorded case numbers having peaked back in March. This provides valuable context to the negativity in the PMI’s jobs index.”
