BNZ – BusinessNZ
Performance of
Manufacturing
Index

Tough year

19 Jan, 2024
43.1
December
-3.4

Monthly Change

Contracting
Faster Rate

Activity in New Zealand’s manufacturing sector ended in further contraction, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for December was 43.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was down from 46.5 in November and the lowest level of activity since October. It also meant the sector has been in contraction for ten consecutive months.

BusinessNZ’s Director, Advocacy Catherine Beard said that the December result was the second lowest during 2023, highlighting how tough the second half of 2023 in particular has been for manufacturers.

“While the year started off with consecutive results in expansion, since then it has gotten progressively harder for manufacturers with July-December activity averaging only 45.0, compared with January-June averaging 49.2. Also of note that for December, the key sub-index of Production (40.5) was at its lowest point for a non-lockdown COVID month since March 2009″.

The proportion of negative comments in December stood at 61%, which was up from 58.7% in November but down from 65.1% in October. Ongoing issues around a lack of demand and sales was the overriding theme mentioned by many manufacturers.

BNZ’s Head of Research, Stephen Toplis, stated that “the December PMI reaffirms our view that economic conditions remain very difficult. While we expect the economy, and the manufacturing sector, to gain some momentum by end 2024, the next few months will remain challenging especially with retail spending and construction activity being under pressure”.

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

The PMI

November’s bounce in the PMI looks increasingly like it was of the dead cat variety. December’s outturn was simply miserable and saw the vast majority of the previous month’s gains reverse.

Read more

Labour Market

In line with the cuts in production it looks like the manufacturing sector continues to lay off staff. Employment levels, at least by this measure, have been in retreat for most of 2023.

Read more

Implications for New Zealand GDP

By the end of September 2023 eight out of the nine manufacturing subsectors in New Zealand’s GDP accounts were going backwards on an annual basis.

Read more

The outlook

The domestic manufacturing sector is largely dependent on four factors: domestic demand (especially retail sales); food production; construction; and exports. It will thus be supported by the country’s strong migration-driven population growth and the spending of a growing number of tourists.

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 2022 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023
BNZ – BusinessNZ PMI 48.7 45.9 45.2 42.8 46.5 43.1
Production 49.6 43.6 44.3 41.6 43.5 40.5
Employment 49.9 47.7 45.3 43.8 47.9 46.7
New Orders 49.2 46.6 44.9 44.3 47.4 44.0
Finished Stocks 50.5 51.8 51.2 45.7 50.4 45.9
Deliveries 49.6 47.5 44.3 43.2 47.8 43.4

BNZ – BusinessNZ PMI Time Series

January 2019 – December 2023

International Results

J.P. Morgan Global Manufacturing PMITM

02 Jan 2024
49.0

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