BNZ – BusinessNZ
Performance of
Manufacturing
Index

That sinking feeling – PMI

13 Sep, 2019
48.4
August
+0.3

Monthly Change

contracting
faster rate

New Zealand’s manufacturing sector remained in contraction for the second consecutive month, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for August was 48.4 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  While this was 0.3 points up from July, the last time the sector experienced a decline for two months in a row was 2012.

BusinessNZ’s executive director for manufacturing Catherine Beard said when the headline result is broken down into the key sub-index values, a few concerns stand out. 

“The sub-index of new orders (45.6) dived further into decline during August, and at its lowest point in over ten years (May 2009).  Given production (49.7) fell from expansion in July to decline in August, further declines in new orders will typically lead to worsening of production levels in the months ahead.

“While employment (49.3) showed some recovery from July, it has remained in contraction for four consecutive months.  Deliveries of raw materials (48.0) also remained in a tight band of contraction between 48-0-48.9 for three consecutive months.  

The proportion of positive comments for August (47.4%) improved from July (44.0%), although a number of businesses outlined the general weakening of orders due to an overall economic downturn.

BNZ Senior Economist, Doug Steel said that “disconcertingly, the PMI adds to a building case over recent times that there has been a palpable softening in demand – at least for manufactured goods”.

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

Under Pressure

Back in July, the Performance of Manufacturing Index (PMI) dipped into contractionary territory for the first time in 82 months. There was no reprieve in August.
Read more

Lower Order

The details only add to the sense of retreat. Production contracted in August, as new orders have collapsed over the past couple of months. From a below normal 52.2 in June, new orders slumped to 48.5 in July, before falling further to 45.6 in August.
Read more

Pulling Back

In line with weak activity indicators, PMI employment was in negative territory for the fourth consecutive month in August.  Yes the employment index bounced to 49.3 from a truly dismal level of 42.3 it plumbed in July, but it remains contractionary.
Read more

GDP Implications

We think manufacturing will be a drag on NZ’s Q2 GDP figures when they are released next Thursday. And the PMI through July and August suggests the sector will also struggle to make a positive contribution to growth in Q3.
Read more

Doug Steel

Doug Steel

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 Aug
2018
Apr
2019
May
2019
Jun
2019
Jul
2019
Aug
2019
BNZ – BusinessNZ PMI 52.4 52.7 50.2 51.1 48.1 48.4
Production 52.7 50.4 46.8 51.2 51.2 49.7
Employment 48.5 51.5 48.6 47.7 42.3 49.3
New Orders 54.2 52.3 50.4 52.2 48.5 45.6
Finished Stocks 52.2 52.1 56.4 57.2 53.1 53.0
Deliveries 54.1 54.1 51.2 48.5 48.9 48.0

BNZ – BusinessNZ PMI Time Series

August 2018 – August 2022

International Results

J.P. Morgan Global Manufacturing PMITM

03 Sep 2019
49.5

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.

PMI Releases

Building blocks – PMI

New Zealand's manufacturing sector saw another lift in expansion for August, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for August was 54.9 (a PMI reading above 50.0 indicates that manufacturing is...

On the margins – PMI

New Zealand's manufacturing sector rose back into expansion for July, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).The seasonally adjusted PMI for July was 52.7 (a PMI reading above 50.0 indicates that manufacturing is generally...

Mid year blues – PMI

New Zealand’s manufacturing sector fell back into contraction for the first time since the most recent national lock-down in August 2021, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

Soldering on – PMI

New Zealand’s manufacturing sector remained under its long-term average level of activity for May, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

Slow grind – PMI

New Zealand’s manufacturing sector experienced a lower level of expansion during April, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

Our Contributors

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