New Zealand’s manufacturing sector continued its contraction in May, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for May was 48.9 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). The latest result was all but unchanged from April, and still well below the long-term average activity rate of 53.0.
BusinessNZ’s Director, Advocacy Catherine Beard said that despite a few positive movements in the make-up of the Index, the sector is still continuing its trend of contraction.
“New Zealand’s manufacturing sector has remained in a relatively tight band of contraction for the last three months. While the overall activity result has crept upwards over that time, Production (45.7) remains stumblingly entrenched below the 50-point mark. Employment (49.5) did lift compared with the previous two months, while New Orders (50.8) provided a positive result after two months of contraction.
The proportion of negative comments stood at 66.7%, slightly down from 70.3% in April, but up on 63.2% in March and 60.2% in February. Beyond seasonal factors such as weather, comments tended to concentrate on slowing orders/deteriorating demand and lower sales levels.
BNZ Senior Economist, Craig Ebert stated that “the range of results in the sub-components is mirrored in the breadth of issues manufacturers are now highlighting in the survey. Gone is the dominance of supply-side laments, especially regarding staff. But new negatives have arisen, for all of them to (still be) outnumbering the positive issues referenced”.
