BNZ – BusinessNZ
Performance of
Manufacturing
Index

Summer slowdown – PMI

19 Jan, 2018
51.2
December
-6.5

Monthly Change

expanding
slower rate

New Zealand’s level of manufacturing expansion slowed during December, according to the BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for December was 51.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was 6.5 points down from the previous month, and the lowest result since December 2012.  Despite the drop from November, the sector has remained in expansion in all months since October 2012.

BusinessNZ’s executive director for manufacturing Catherine Beard said that while it was disappointing to see the last month of 2017 showing a sizeable dip in expansion levels, the wider context of the results needs to be taken into account.

“While all sub-indexes dropped in December, they all still remain in expansion.  Also, the proportion of positive comments in December (63.3%) was very close to the November result (65.1%).  Christmas and the general holiday season were mentioned for those who provided both positive and negative comments, along with weather conditions.  Overall, we’ll be looking to the January result to see if the sector gets back into the level of expansion its been accustomed to in recent times.

BNZ Head of Research, Stephen Toplis, said that “anecdotal evidence, across the economy, suggests there was a post-election hiccup in activity as businesses put off major spending, investment and hiring decisions until there was greater clarity and, more importantly, understanding of likely policy shifts. Today’s data are consistent with this hypothesis”.

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

Aberration or Warning Sign

An aberration or a warning sign of things to come? That’s the question on our lips as we look at the data provided in the December Performance of Manufacturing Index (PMI).
Read more

Widespread Retreat

Moreover, all components of the index were in retreat with production levels, new orders and deliveries of raw materials driving the slowdown.
Read more

GDP Headed Sub-Consensus

As things stand, we are already forecasting a subconsensus 0.5% increase for Q4 economy-wide GDP.  There appears to be increasing downside risk to this pick.
Read more

Stephen Toplis

Stephen Toplis

Head of Research, 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 Dec
2016
Aug
2017
Sep
2017
Oct
2017
Nov
2017
Dec
2017
BNZ – BusinessNZ PMI 54.8 58.0 57.7 57.3 57.7 51.2
Production 58.5 60.5 59.7 60.7 61.7 53.3
Employment 52.4 56.7 51.1 51.1 54.1 51.3
New Orders 54.0 59.0 60.6 59.8 57.3 50.2
Finished Stocks 52.6 52.9 55.4 54.9 56.7 51.9
Deliveries 54.9 56.1 58.3 58.0 58.8 50.0

BNZ – BusinessNZ PMI Time Series

December 2020 – December 2024

International Results

J.P. Morgan Global Manufacturing PMITM

02 Jan 2018
54.5

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]

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Our Contributors

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