According to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI), New Zealand’s manufacturing sector was expanding in March, albeit at a slower rate than previously.

The seasonally adjusted PMI for March was 53.2 (a reading above 50.0 indicates that manufacturing as a whole is expanding, below 50.0 that it is contracting). This was down from 54.8 in February and 55.0 in January, but still above the long-term average of 52.5.

BusinessNZ’s Director of Advocacy, Catherine Beard said: “It is gratifying to see that the manufacturing sector is still expanding but, at the same time, it is concerning to note that the proportion of businesses commenting negatively about their situation increased to 62.0%, from 44.5% in February.” The comments showed that the war in Iran, and its wider consequences, are weighing heavily on the minds of the respondents.

Despite the downturn in confidence, the New Orders sub-index was the strongest, at 55.8. The weakest was Deliveries of Raw Materials, at 50.0. The sub-index for Production was 53.8, the sub-index for Employment was 51.4, and the sub-index for Stocks of Finished Products was 54.0.

BNZ’s Senior Economist Doug Steel said that “The PMI result supports our view that economic growth was reasonable in the first quarter of the year, even though material headwinds had accumulated by quarter’s end.”