New Zealand’s manufacturing sector slipped back into contraction in August, based on the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI) figures.
The BNZ Performance of Manufacturing Index (PMI) dropped 2.9 points to 49.9.
A score under 50.0 signifies contraction.
BNZ’s Senior Economist Doug Steel said that “manufacturers are continuing to do it tough. We believe the general trend in the economy is still upwards, but indicators are often choppy around a turning point.”
For BusinessNZ’s Director of Advocacy, Catherine Beard, the August results indicate the sector has not yet reached a point of sustained growth.
“Two of the five main sub-index values were in expansion during August. This was led by new orders (55.2), which encouragingly continues to trend upwards, reaching its highest level of activity since August 2022. Deliveries of raw materials (50.5) also remained in expansion, although down from July.”
“In contrast, production (46.6) fell 6.7 points from July, while employment (49.1) and finished stocks (47.1) also recorded contraction.”
Steel said that increasing new orders and deliveries often signal an upcoming recovery, even if the main data does not yet reflect it.
He cautions that the manufacturing recovery is starting from a very weak base, despite the Reserve Bank’s basis point easing, and today’s developments will reinforce its shift toward increased stimulus.