Manufacturing activity steady - PMI Survey

Manufacturing activity steadied, with similar levels of expansion as for the last two months, according to the Business NZ Performance of Manufacturing Index (PMI).

April’s seasonally adjusted PMI, at 53.1 was similar to the March result of 53.6. Activity during 2006 has been in expansion for three of the four months recorded, and confirms some improvement after a lacklustre second half of 2005.

A PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining.

PMI values for April in 2003, 2004 and 2005 were 53.8, 59.3 and 52.4 respectively.

Activity by region remained largely unchanged for the Central (50.7) and Otago/Southland (56.3) regions, but there was a noticeable dip for the Northern (46.9) and Canterbury/Westland (44.0) regions.

All five seasonally adjusted main diffusion indexes again recorded very similar levels of expansion for April 2006. Both deliveries and new orders (53.8) recorded the same highest value for the month, while the remaining indexes ranged in value between 52.0-52.2. Interestingly, the employment index saw its highest value since February 2005.

The April result follows two previous months of positive results, which highlights further recovery into 2006 after poor results during the later half of 2005. Comments from manufacturers were generally more negative (58%) than positive (42%), with the recent falls in the NZ dollar continuing to lead to outcomes across the board. Domestic manufacturers have found a lift in import prices, whereas some export orientated manufacturers have experienced a pick up in orders from offshore. However, the muddled picture of the New Zealand economy at the moment has meant domestic orders for certain firms have been sluggish, as consumer confidence remains low.

ATTACHMENTS:
060511 April PMI 2006.pdf
060511 PMI Unadjusted and Seasonally Adjusted Time Series graph.xls
060511 PMI April 2006 graph.doc

Full results are available on http://www.businessnz.org.nz under ‘PMI Reports’.

The Business NZ PMI (performance of manufacturing index) draws on the depth of member companies associated with Business NZ: Employers and Manufacturers Association (Northern), Employers and Manufacturers Association (Central), Canterbury Employers’ Chamber of Commerce and Otago Southland Employers Association.

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