Summer slowdown – PMI

19 Jan 2018

51.2

December

-6.5

Monthly Change

expanding

slower rate

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Catherine Beard

Executive Director,, ExportNZ & ManufacturingNZ

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New Zealand's level of manufacturing expansion slowed during December, according to the BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for December was 51.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was 6.5 points down from the previous month, and the lowest result since December 2012.  Despite the drop from November, the sector has remained in expansion in all months since October 2012.

BusinessNZ's executive director for manufacturing Catherine Beard said that while it was disappointing to see the last month of 2017 showing a sizeable dip in expansion levels, the wider context of the results needs to be taken into account.

"While all sub-indexes dropped in December, they all still remain in expansion.  Also, the proportion of positive comments in December (63.3%) was very close to the November result (65.1%).  Christmas and the general holiday season were mentioned for those who provided both positive and negative comments, along with weather conditions.  Overall, we'll be looking to the January result to see if the sector gets back into the level of expansion its been accustomed to in recent times.

BNZ Head of Research, Stephen Toplis, said that "anecdotal evidence, across the economy, suggests there was a post-election hiccup in activity as businesses put off major spending, investment and hiring decisions until there was greater clarity and, more importantly, understanding of likely policy shifts. Today’s data are consistent with this hypothesis".

View the Time Series Data


Main Indicies

Regional Results

Manufacturing Landscape
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Stephen Toplis

Head of Research, New Zealand, BNZ

Aberration or Warning Sign

An aberration or a warning sign of things to come? That’s the question on our lips as we look at the data provided in the December Performance of Manufacturing Index (PMI).
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Widespread Retreat

Moreover, all components of the index were in retreat with production levels, new orders and deliveries of raw materials driving the slowdown.
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GDP Headed Sub-Consensus

As things stand, we are already forecasting a subconsensus 0.5% increase for Q4 economy-wide GDP.  There appears to be increasing downside risk to this pick.
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View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesDec
2016
Aug
2017
Sep
2017
Oct
2017
Nov
2017
Dec
2017
BNZ - BusinessNZ PMI 54.858.057.757.357.751.2
Production58.560.559.760.761.753.3
Employment 52.456.751.151.154.151.3
New Orders54.059.060.659.857.350.2
Finished Stocks52.652.955.454.956.751.9
Deliveries54.956.158.358.058.850.0

View the Time Series Data

BNZ - BusinessNZ PMI Time Series

July 2014 – December 2018

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
2 Jan 2018

54.5

International PMI