Manufacturing activity consolidated in April according to the Business NZ Performance of Manufacturing Index (PMI).
April’s seasonally adjusted PMI, at 54.2, was down 2.6 points from March, but still up on the 54.0 recorded in February. A PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining.
PMI values for April in 2003-2006 were 53.4, 58.9, 52.0 and 52.7 respectively.
Business NZ Chief Executive Phil O’Reilly said even though the PMI was on the positive side of 50, manufacturers still faced real problems.
“The high dollar is still the hot issue,” Phil O’Reilly said. “But higher interest rates, a slowdown in demand and rising cost pressures are also biting into manufacturing profitability”.
Comments by manufacturers surveyed showed negative sentiment increasing significantly. 69% of those who made comment expressed concerns, up from the 62% recorded in March and significantly up from the 43% recorded in November.
Around 37% of negative comments specifically mentioned the high dollar.
However some manufacturers mentioned difficulties in expanding production because of labour shortages, and others indicated they are still managing to increase offshore orders despite the exchange rate.
“It’s an ongoing testament to the resilience of some New Zealand manufacturers,” Mr O’Reilly said.
Unadjusted activity in March was expansionary in two of the four regions covered. Activity was slightly lower in the Canterbury/Westland and Otago/Southland regions for April than previously, but it was still in positive mode with indices of 52.5 and 57.0 respectively. The Northern and Central regions had declines in activity (down to 48.7 and 47.7 respectively).
Print