Trans-Tasman angst – PMI
New Zealand’s manufacturing sector experienced a lower level of activity in April, although still showing overall expansion, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for April was 51.8 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2.8 points lower than March, and close to the level of expansion experienced in January. Despite the expansion dip, the sector has now been in expansion for 31 consecutive months.
BusinessNZ’s executive director for manufacturing Catherine Beard said that comments from respondents provided a useful picture of why the level of expansion dropped from the previous month.
“Although the proportion of negative comments for April (43%) did not increase by a significant proportion from March, there was a distinct pattern of respondents mentioning the current economic situation across the ditch. Some outlined the high value of the New Zealand dollar relative to the Australian, while others mentioned the general lacklustre Australian economy causing lower demand for New Zealand products.”
BNZ senior economist Doug Steel said “While the New Zealand dollar was high against the Australian dollar in April it has retreated rather rapidly in May. This, if sustained, should lend support to the PMI over coming months.”