On the edge – PMI

14 Jun 2019




Monthly Change


slower rate

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Catherine Beard

Executive Director, ExportNZ & ManufacturingNZ

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New Zealand's manufacturing sector was close to no change in activity for May, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for May was 50.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was 2.5 points down from April, and the lowest level of overall activity since December 2012.

BusinessNZ's executive director for manufacturing Catherine Beard said that the drop in activity to its lowest point in over six years was obviously a concern, especially when the sub-index values are examined.

"Production (46.4) was at its lowest value since April 2012, while the other key sub-index of new orders (50.4) only just managed to stay in positive territory.  Given the latter feeds through into the former, it does not instil a strong belief that the sector will show solid improvement over the next few months".

On a more positive note, the proportion of positive comments for May (54.3%) improved from April (48.9%).  A number of positive comments focussed on business as usual, while negative comments outlined quieter domestic and offshore demand.

BNZ Senior Economist, Doug Steel said that “the PMI sends a warning signal for near term growth via its mix of falling production, near flat new orders, and rising inventory. Next week’s Q1 GDP should be reasonable, but beyond this downside risks are accumulating”.

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Main Indicies

Regional Results

Manufacturing Landscape
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Doug Steel

Senior Economist, BNZ

Warning Signs Escalate

The Performance of Manufacturing Index (PMI) barely kept its head above water in May, dipping to 50.2 from 52.7 in April. It’s the lowest reading since 2012. As a growth risk indicator it may not be flashing bright red just yet, but it is moving in that direction in taking on a darker shade of amber.
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Disturbing Details

Perhaps most disturbing is a clear contraction in production in May, with the PMI production index falling to 46.4 from an already subdued 50.1 in April. Production looks genuinely weak and is now well below average.
Read more

GDP Implications

For next week’s official Q1 GDP growth figures, we’re expecting minimal contribution from manufacturing. This is based on our reading of this week’s official manufacturing sales and inventory data.
Read more

View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesMay
BNZ - BusinessNZ PMI 54.652.953.451.752.750.2
New Orders56.352.254.652.752.250.4
Finished Stocks51.054.454.953.052.556.5

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BNZ - BusinessNZ PMI Time Series

July 2016 – May 2019

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
3 Jun 2019


International PMI