Expansion in New Zealand’s manufacturing sector picked up in June, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for June was 60.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2.1 points higher than May, and the second time it had crossed the 60-point mark in four months.
BusinessNZ’s executive director for manufacturing Catherine Beard said that “the two major sub-index values of Production (64.5) and New Orders (63.6) remain firmly in strong expansion mode. Employment (56.5) also picked up to its highest value since August 2017, while Finished Stocks (57.3) also showed noticeable improvement.”
“The recent partial Wellington lockdown saw activity in that region decline, but was more than compensated for by the other regions recording strong expansion.”
“Despite the overall pick-up in activity, the proportion of negative comments (53.1%) remained higher than positive ones (46.8%). Many of the positive comments outlined increased demand, but this is counterbalanced by significant labour shortages and logistics disruptions many manufacturers are now facing.”
BNZ Senior Economist, Doug Steel stated that “the overt strength in the PMI comes amid ongoing supply side challenges that the sector faces and clear weakness in the Central region during the month.”
