New Zealand’s level of manufacturing expansion rose in January after experiencing lower expansion for the previous month, according to the BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for January was 55.6 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 4.5 points higher than December, although it did not see a return to levels of expansion typically seen during 2017.
BusinessNZ’s executive director for manufacturing Catherine Beard said that while it was positive to see the PMI rebound somewhat after a sizeable drop in expansion during December, comments from manufacturers provide another angle to the story.
“The proportion of positive comments in January (50.7%) was down by a fair margin compared with December (63.3%) and November (65.1%). While seasonal factors such as Christmas and holidays are typically mentioned around this time of year, those outlining negative comments have also focussed on recent uncertainty that has led to softening activity and a slow start to the year for some”.
BNZ Senior Economist, Craig Ebert said that “while the NZ PMI has led the world for the last 5 years, the global PMI has now pretty much caught up. This suggests the international investment cycle is clicking into place and promises to self-sustain the global economic expansion. This should be good for manufacturing industries, New Zealand included”.
