Media release
15 November 2012
Holding on
New Zealand’s manufacturing sector returned to a minor level of expansion in October, although the sector remains in a
flat state, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for October was 50.5 (a PMI reading above 50.0 indicates that manufacturing is generally
expanding; below 50.0 that it is declining). This was 2.0 points up from September and the first level of expansion
after four consecutive months of no expansion. Over the last quarter, the PMI has averaged 48.8, and the year to date at
51.2.
BusinessNZ’s executive director for manufacturing Catherine Beard said that any return to expansion is obviously
positive news, but no one should think this is the immediate start of better times ahead for the sector.
“Looking at the history of the survey, we’ve just come out of the longest consecutive period of contraction since 2009.
On the plus side, an improvement in production and a sharp rise in the number of positive comments by manufacturers are
welcome. However, new orders remain historically low, while those employed in manufacturing have been in decline for
five consecutive months.
BNZ senior economist Craig Ebert said the October result gives hope that the sector is stabilizing after going through a
rough patch in recent months.
“The best way to describe the latest PMI result is ‘relief’, however headwinds for the manufacturing industry still
prevail. The NZ dollar remains high, international demand is patchy, and the NZ economy is looking a bit bumpy and
hesitant, including in employment. Until we see a more concerted and consistent pulse in the PMI, we’ll stay reticent
about the sector’s immediate growth prospects.”
Three of the five seasonally adjusted main diffusion indices were in expansion in October. This was led by production
(53.8), which experienced its highest result since May. This was followed by finished stocks (52.1), displaying its
highest value since August 2011. After consecutive falls in activity, new orders (50.9) managed to return back into
slight expansion for October, while both employment (49.1) edged lower and deliveries (49.7) improved, albeit remaining
in contraction for the last five months.
Given the slight pick-up in the seasonally adjusted result, unadjusted results by region displayed expansion across the
board. The Central region (57.6) led the way for a forth consecutive month, increasing 4.5 points from September. The
Otago-Southland region (54.0) rose 4.2 points to display its highest result since December 2011. Both the Northern
(52.1) and Canterbury/Westland (50.8) regions returned to expansion with their highest results since May this year.
Click here to view the October PMI.
Click here to view seasonally adjusted & unadjusted time series data.
--
PMl results are available on www.businessnz.org.nz under ‘PMI Reports’. For more information or assistance with data interpretation, contact Stephen Summers, ph 04 496
6564, ssummers@businessnz.org.nz. The BNZ - BusinessNZ PMI (performance of manufacturing index) draws on the depth of
member companies associated with BusinessNZ: Employers and Manufacturers Association, Employers’ Chamber of Commerce
Central, Canterbury Employers’ Chamber of Commerce and Otago Southland Employers Association. The survey is sponsored by
Bank of New Zealand Ltd.
ENDS