That sinking feeling – PMI 13 Sep 2019 48.4August+0.3Monthly Changecontractingfaster rate Catherine Beard Executive Director, ExportNZ & ManufacturingNZ View profile New Zealand's manufacturing sector remained in contraction for the second consecutive month, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).The seasonally adjusted PMI for August was 48.4 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). While this was 0.3 points up from July, the last time the sector experienced a decline for two months in a row was 2012.BusinessNZ's executive director for manufacturing Catherine Beard said when the headline result is broken down into the key sub-index values, a few concerns stand out. "The sub-index of new orders (45.6) dived further into decline during August, and at its lowest point in over ten years (May 2009). Given production (49.7) fell from expansion in July to decline in August, further declines in new orders will typically lead to worsening of production levels in the months ahead."While employment (49.3) showed some recovery from July, it has remained in contraction for four consecutive months. Deliveries of raw materials (48.0) also remained in a tight band of contraction between 48-0-48.9 for three consecutive months. The proportion of positive comments for August (47.4%) improved from July (44.0%), although a number of businesses outlined the general weakening of orders due to an overall economic downturn.BNZ Senior Economist, Doug Steel said that “disconcertingly, the PMI adds to a building case over recent times that there has been a palpable softening in demand – at least for manufactured goods”.View the Time Series Data Main Indicies Regional Results Doug Steel Senior Economist, BNZ Under PressureBack in July, the Performance of Manufacturing Index (PMI) dipped into contractionary territory for the first time in 82 months. There was no reprieve in August.Read more Lower OrderThe details only add to the sense of retreat. Production contracted in August, as new orders have collapsed over the past couple of months. From a below normal 52.2 in June, new orders slumped to 48.5 in July, before falling further to 45.6 in August.Read more Pulling BackIn line with weak activity indicators, PMI employment was in negative territory for the fourth consecutive month in August. Yes the employment index bounced to 49.3 from a truly dismal level of 42.3 it plumbed in July, but it remains contractionary.Read moreGDP ImplicationsWe think manufacturing will be a drag on NZ’s Q2 GDP figures when they are released next Thursday. And the PMI through July and August suggests the sector will also struggle to make a positive contribution to growth in Q3.Read more View full BNZ Manufacturing Snapshot PMI Time Series TableThe results are seasonally adjusted. National IndiciesAug2018Apr2019May2019Jun2019Jul2019Aug2019 BNZ - BusinessNZ PMI 52.452.750.251.148.148.4 Production52.750.446.851.251.249.7 Employment 48.551.548.647.742.349.3 New Orders54.252.350.452.248.545.6 Finished Stocks52.252.156.457.253.153.0 Deliveries54.154.151.248.548.948.0 View the Time Series Data BNZ - BusinessNZ PMI Time Series July 2016 – August 2019 International ResultsJ.P. Morgan Global Manufacturing PMITM 3 Sep 201949.5 In this section Surveys & Statistics Performance of Manufacturing Index Performance of Services Index Compliance Cost Survey Exporters Survey Southern Cross Health Society - BusinessNZ Wellness in the Workplace Survey Reports & Publications BusinessNZ Planning Forecast International Guides & Tools BNZ - BusinessNZ PMI Time Series Data View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PMI BNZ is delighted to be associated with the Performance of Manufacturing Index (PMI) and BusinessNZ.This association brings together the significant experience of leading business advocacy body BusinessNZ, and business finance specialist BNZ.We look forward to continuing our association with BusinessNZ and associated regional organisations, and to playing our part in the ongoing development of the New Zealand manufacturing sector. View website Media Comment For media comment, please contact: Catherine Beard, ExportNZ & ManufacturingNZ 04 496 6560 Doug Steel, BNZ 04 474 6799 Technical Comment For more information or assistance with data interpretation, please contact: Steve Summers 04 496 6564 ssummers@businessnz.org.nz Our Contributors The BNZ - BusinessNZ PMI contains data obtained through BusinessNZ's regional organisations About the PMI The BNZ - BusinessNZ Performance of Manufacturing Index is a monthly survey of the manufacturing sector providing an early indicator of activity levels.A PMI reading above 50 points indicates manufacturing activity is expanding; below 50 indicates it is contracting.The main PMI and sub-index results are seasonally adjusted. Related Articles Blooming good – PMI Steady state – PMI Now hiring – PMI Stretching out – PMI Pumping production – PMI View more