BNZ – BusinessNZ
Performance of
Manufacturing
Index

Weaker production and new orders slow manufacturing recovery – PMI

17 Sep, 2009

A lower result for both production and new orders meant activity fell back for August, according to the BNZ Capital – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for August stood at 48.7. This was down 0.9 points from July, which had shown the highest level of activity since April 2008.

A PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining. PMI values for August in the years 2002-2008 ranged from 45.4-57.4, with an average score for the previous August results of 52.9.

BusinessNZ chief executive Phil O’Reilly said that the slight fall in August was disappointing after steady improvements throughout most of 2009, and in particular some stronger upwards movement over the last two months.

“July’s result was the closest one to expansion since April 2008, so a positive result for August would have broken a long drought for New Zealand’s manufacturing sector. However, it was not to be, with the two key indicators of production and new orders pulling back as concerns linger about the state of the general economy. On the positive side, employment was at its highest level since May 2008 – a sharp improvement from one of its lowest results in June.

“Since the July PMI the New Zealand dollar has continued to appreciate, although the proportion of comments from respondents regarding exchange rate issues is still nowhere near levels recorded in 2007/2008. General concerns remain focussed on the general economic climate having flow-on effects into their business, as well as an orders/sales base that is still largely soft and unpredictable.

BNZ Capital senior economist Craig Ebert said the slippage in August is a timely note of caution – as while they expected a mild economic recovery around this time, the shape of the recovery remains uncertain.

“To be fair, this downfall has come amid the worst global economic performance in many a decade and more so in respect to trade and manufacturing. In this respect, New Zealand can be especially thankful it’s not a producer of vehicles.”

Four of the five seasonally adjusted main diffusion indices displayed contraction. Production (48.8) went back to showing contraction after moving into positive territory in July. New orders (50.3) remained above 50 for the third successive month, although down from the July result. Encouragingly, employment (46.9) reached its highest level since May 2008, and a significant improvement on the 39.5 recorded two months earlier. Deliveries of raw materials (48.0) experienced further improvement (albeit at a minimal level), while finished stocks (48.7) rose 6 points to its highest result since February 2009.

Unadjusted activity for August showed a similar pattern to July for most regions. Activity in the Northern region (47.3) was largely unchanged, down 0.1 points from July. Both the Central (52.3) and Canterbury/Westland (56.4) regions remained in expansion, with the former decreasing 0.4 points and the later rising 1.5 points. The Otago/Southland region (48.2) continued to seesaw in terms of the level of contraction.

Click here to view the August PMI
Click here to view the PMI time series data

For media comment:
Kathryn Asare, ph 04 496 6556 or 021 555 744
Craig Ebert, ph 04 474 6799

BNZ - BusinessNZ PMI

Time Series Data

View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PMI

Manufacturing Snapshot

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.

BNZ – BusinessNZ PMI Time Series

January 1966 – January 1970

International Results

J.P. Morgan Global Manufacturing PMITM

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.

PMI Releases

Building blocks – PMI

New Zealand's manufacturing sector saw another lift in expansion for August, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for August was 54.9 (a PMI reading above 50.0 indicates that manufacturing is...

On the margins – PMI

New Zealand's manufacturing sector rose back into expansion for July, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).The seasonally adjusted PMI for July was 52.7 (a PMI reading above 50.0 indicates that manufacturing is generally...

Mid year blues – PMI

New Zealand’s manufacturing sector fell back into contraction for the first time since the most recent national lock-down in August 2021, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

Soldering on – PMI

New Zealand’s manufacturing sector remained under its long-term average level of activity for May, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

Slow grind – PMI

New Zealand’s manufacturing sector experienced a lower level of expansion during April, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

Our Contributors

The BNZ – BusinessNZ PMI contains data obtained through BusinessNZ’s regional organisations