Camped behind the line – PMI

11 Oct 2019

48.4

September

0.0

Monthly Change

contracting

same rate

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Catherine Beard

Executive Director,, ExportNZ & ManufacturingNZ

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New Zealand's manufacturing sector displayed contraction for a third consecutive month, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for September was 48.4 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was also the same level of contraction as August.

BusinessNZ's executive director for manufacturing Catherine Beard said that the September result showed both positive and negative signals.

"The sub-index of new orders (50.1) recovered from its decline in August to just keep its head above water for September.  Also, employment (50.0) showed no change following four consecutive monthly declines.  However, the weak new order results in recent months meant production (46.2) fell to its lowest result since April 2012.  In addition, deliveries of raw materials (46.4) fell to its lowest since March 2011.

"Overall, while it is good to see the sector not declining further, it remains stuck in a tight band of contraction.  The key to lifting it back into expansion will be a sustained boost to both new orders and production in the months ahead. 

The proportion of positive comments for September (48.8%) again improved from the previous month, although a number of businesses who outlined positive influences still regard the current climate as a mixed bag.

BNZ Senior Economist, Doug Steel said that “the October PMI is hardly what you would call strong. But it is certainly much better than the previous three months where the index languished below 50 which indicated a sector going backwards”.

View the Time Series Data


Main Indicies

Regional Results

Manufacturing Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PMI

New Zealand’s Performance of Manufacturing Index (PMI) remained weak in September. Indeed, its seasonally adjusted result, of 48.4, indicated contraction in the industry, for the third month in a row.
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QSBO

Still, struggle was also the message from manufacturing firms in last week’s NZIER Quarterly Survey of Business Opinion (QSBO). Their reports of output over the trailing 3 months became even more contractionary. This was mirrored in reports of deliveries, employment, export sales, and new orders.
Read more

Looking forward

While the PMI and QSBO paint a broadly dour picture around manufacturing, each of them also held some hope that the worst might just be passing.
Read more

Capacity

The QSBO also showed a firming in manufacturers’ intentions to invest in plant and machinery, after some wobbles in the first half of this year. While the number on this was virtually flat, it was actually good enough to be around its long-term average.
Read more

View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesSep
2018
May
2019
Jun
2019
Jul
2019
Aug
2019
Sep
2019
BNZ - BusinessNZ PMI 51.950.351.148.148.448.4
Production50.846.851.150.949.246.2
Employment 51.048.547.842.349.950.0
New Orders52.150.452.348.745.950.1
Finished Stocks53.456.557.153.052.848.8
Deliveries52.651.248.548.947.946.4

View the Time Series Data

BNZ - BusinessNZ PMI Time Series

July 2014 – September 2019

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
1 Oct 2019

49.7

International PMI