No Xmas cheer – PMI

17 Jan 2019

49.3

December

-1.9

Monthly Change

contracting

slower rate

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Catherine Beard

Executive Director,, ExportNZ & ManufacturingNZ

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New Zealand's manufacturing sector fell back into contraction for the last month of 2019, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for December was 49.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was a second consecutive decrease in activity, and the lowest result since September.

BusinessNZ's executive director for manufacturing Catherine Beard said that the contraction experienced in December was symptomatic of how 2019 played out for the sector.

"The manufacturing sector averaged 50.9 over 2019, compared with 53.8 for 2018 and 56.2 for 2017.  While the first half of the year managed to just keep its head above water, the second half saw four of the six months in contraction.   

"Looking at the sub-index values for 2019, the key results for production and new orders averaged 50.1 and 51.7 respectively.  Employment struggled to gain traction, averaging 49.4 over 2019.  At this stage there is not much evidence to suggest the first half of 2020 will see a noticeable improvement. 

BNZ Senior Economist, Craig Ebert said that “the December result was disappointing.  After a couple of months flirting with positivity, the PMI dipped back just below the breakeven line again".

View the Time Series Data


Main Indicies

Regional Results

Manufacturing Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PMI

It’s disappointing. After a couple of months flirting with positivity, New Zealand’s Performance of Manufacturing Index (PMI) dipped back just below the breakeven line again in December.
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QSBO reports

A sense of struggle could also be extracted from the manufacturing section of Tuesday’s NZIER Quarterly Survey of Business Opinion (QSBO).
Read more

QSBO expectations

Having said this, the QSBO also pointed to the manufacturing sector probably being through its worst now. Respondents expected output over the coming 3 months to pick up noticeably, for example.
Read more

Capacity

For the meantime, capacity utilisation in New Zealand’s manufacturing industry has come off the boil, to an extent. The QSBO variable on this – known as CUBO – eased to 91.0% in the December quarter, from 92.5% in the September quarter, and 92.7% back in June.
Read more

View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesDec
2018
Aug
2019
Sep
2019
Oct
2019
Nov
2019
Dec
2019
BNZ - BusinessNZ PMI 55.048.648.852.651.249.3
Production55.049.646.552.449.448.2
Employment 52.050.250.050.049.149.9
New Orders56.544.951.056.054.051.0
Finished Stocks57.652.549.148.749.252.8
Deliveries59.648.547.451.352.650.7

View the Time Series Data

BNZ - BusinessNZ PMI Time Series

July 2014 – December 2019

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
2 Jan 2020

50.1

International PMI