New Zealand manufacturing recorded increased expansion in August, according to the latest ANZ-Business NZ Performance of Manufacturing Index (PMI).
New Zealand’s PMI value rose from 57.5 in July to 58.8 in August, while it also recorded a stronger expansionary value than for August 2002 and 2003 (a PMI reading above 50 points indicates expansion and below 50 indicates decline).
New orders (63.6) again led the way in August, followed by deliveries of raw materials (60.7). Production and finished stocks also recorded expansion. Employment was the only index not to record expansion after falling to 50.2 in August.
All four regions recorded expansion for August, with the Northern region indicating the strongest level, followed by Canterbury/Westland. The Otago/Southland region recovered from its July decline to record the third highest level of expansion for August.
Despite all sectors recording expansion for August, comments were mixed amongst sectors. The metal product sector noted a continued lack of skilled staff, leading to a decline in employment levels for August. This is consistent with other labour market indicators which suggest businesses are finding it difficult to find suitable applicants across all skill levels. The food, beverage & tobacco sector commented on preparations already beginning for the Christmas season, while the machinery & equipment sector continued to experience a stable flow of new orders, particularly from the domestic market.
As in July, current manufacturing conditions were deemed to be better than at the same point in 2003. The main positives during August were increased domestic and international demand, as well as diversification through new product lines. However, a lack of skilled staff seems to again be a factor hampering expansion.
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