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”.