February pause – PMI

11 Mar 2016

56.0

February

-2.0

Monthly Change

expanding

slower rate

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Catherine Beard

Executive Director,, ExportNZ & ManufacturingNZ

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New Zealand's manufacturing sector experienced a slower rate of expansion in February, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for February was 56.0 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2 points down from January, although still the third highest level of activity over the last 12 months.  The sector has now been in continued expansion since October 2012.

BusinessNZ's executive director for manufacturing Catherine Beard said that while January's sizzling result could not be built on, the level of expansion was still healthy in the sector for February.  This was also supported by the fact that over two-thirds of comments remain positive.
 
"The other area of interest in the February result was the slight contraction in employment, which last occurred in December 2014.  Given the other sub-indexes of new orders and production remain very healthy, it will be interesting to see how employment growth plays out in the months to come ."    

BNZ Senior Economist Doug Steel said 'We would be more concerned by the dip in the employment indicator this month if it were not for very strong new orders and ongoing underlying strength in broader spending indicators. Overall, the PMI remains robust.'

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Main Indicies

Regional Results

Manufacturing Landscape
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Doug Steel

Senior Economist, BNZ

PMI Robust

New Zealand's Performance of Manufacturing Index (PMI) was firm in February. Sure, it slowed a couple of points to 56.0, from January's 58.0, but it remains firmly in the mid-50s zone implying a solid rate of expansion.

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Detail: Disaster or Delight?

While the overall PMI looks as solid as it has for many months now, it is not without some interesting detail. Take the significant drop in the employment index for instance. While it might just be monthly noise we should not dismiss it out of hand.

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Dairy Drag

Extreme weakness in the dairy industry continues to influence parts of manufacturing. This looks set to continue with a further reduction in the current season's payout forecast.

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Spending Strong

Spending indicators remain buoyant. The value of total electronic transactions in February was a whopping 9.5% higher than a year earlier.

Read more .

View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National Indicies Feb
2015
Oct
2015
Nov
2015
Dec
2015
Jan
2016
Feb
2016
BNZ - BusinessNZ PMI 56.653.555.157.058.056.0
Production53.853.654.257.060.356.6
Employment 52.752.353.853.154.748.5
New Orders62.756.058.260.060.061.0
Finished Stocks53.249.750.755.154.557.1
Deliveries58.152.955.057.658.156.8

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BNZ - BusinessNZ PMI Time Series

July 2014 – February 2016

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
1 Mar 2016

50.0

International PMI