New Zealand’s manufacturing sector showed further contraction in June, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for June was 47.5 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was the lowest level of activity since November 2022, and well below the long-term average activity rate of 53.0.
BusinessNZ’s Director, Advocacy Catherine Beard said that the sector remains entrenched in contraction, with eight of the last ten months showing overall activity below the 50.0 point mark.
“The key sub-index values of Production (47.5) and New Orders (43.8) dragged the June result further into contraction, while Employment (47.0) also shifted down a gear. Any return to long run activity levels needs these sub-index values returning to positive territory.
The further drop in activity also saw the proportion of negative comments increasing to 74.5% in June, compared with 66.7% in May and 70.3% in April. Manufacturers saw declining demand, cost increases/inflation and production/staffing issues as the key negative influences on activity for the current month.
BNZ Senior Economist, Craig Ebert stated that “for a weaker reading one has to go back to August 2021 (39.0), when the Delta strain outbreak of COVID-19 invoked level-4 lockdowns”.
