Easing off – PMI

13 Apr 2018

52.2

March

-1.1

Monthly Change

expanding

slower rate

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Catherine Beard

Executive Director, ManufacturingNZ & ExportNZ

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New Zealand's level of manufacturing expansion decreased further in March, according to the BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for March was 52.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was 1.1 points lower than February, and the second consecutive decrease in overall expansion levels for 2018.

BusinessNZ's executive director for manufacturing Catherine Beard said that the manufacturing story of 2018 continues, whereby it is still showing expansion, but at a different level to 2017.

"On a positive note, the proportion of positive comments in March (55.1%) picked up from both February (51.4%) and January (50.7%).  Those who provided negative comments typically noted a lack of finding the right staff, reduced orders (both domestically and offshore) and general uncertainty in the market.

BNZ Senior Economist, Craig Ebert said that "the weak spot in March’s PMI was its production index.  With a seasonally adjusted outcome of 50.8 this was close to stalling. Compare this to February’s 53.7 and the exceptionally high reading of 61.0 back in November and a sense of sharp deceleration arises".

View the Time Series Data


Main Indicies

Regional Results

Manufacturing Landscape
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Craig Ebert

Senior Economist, BNZ

The PMI

New Zealand’s Performance of Manufacturing Index (PMI) has only looked weak this year in comparison to its racy performance across 2017. In March it slowed to a seasonally adjusted 52.2, compared to February’s average-like 53.3.
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QSBO Manufacturing

The weak spot in March’s PMI was its production index. With a seasonally adjusted outcome of 50.8 this was close to stalling. Compare this to February’s 53.7 and the exceptionally high reading of 61.0 back in November and a sense of sharp deceleration arises.
Read more

Capacity Constraint

Even if manufacturing production does struggle for the meantime, it could well reflect a lack of capacity rather than any poverty of demand. The difference carries diametrically opposed conclusions for inflation.
Read more

Investment

The NZIER’s QSBO also added to the context of manufacturers by showing that the sector’s investment intentions were generally robust. This was certainly the case with respect to plant and machinery, where a net balance of 23% intended expansion.
Read more

View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesMar
2017
Nov
2017
Dec
2017
Jan
2018
Feb
2018
Mar
2018
BNZ - BusinessNZ PMI 57.957.651.254.253.352.2
Production59.761.053.653.953.750.8
Employment 53.554.351.552.754.753.5
New Orders64.457.049.755.454.253.8
Finished Stocks52.357.351.852.750.553.8
Deliveries54.558.449.754.952.753.2

View the Time Series Data

BNZ - BusinessNZ PMI Time Series

January 2013 – March 2018

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
3 Apr 2018

53.4

International PMI