Back in black – PMI

17 Jul 2020

56.3

June

+16.5

Monthly Change

expanding

previously contracting

View Catherine Beard's profile

Catherine Beard

Executive Director, ExportNZ & ManufacturingNZ

View profile

New Zealand's manufacturing sector showed expansion for the first time since February, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for June was 56.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was up 16.5 points from May, and the highest result since April 2018.

BusinessNZ's executive director for manufacturing Catherine Beard said that a return to expansion for the sector was obviously a welcome result given the very difficult period experienced over the last three months.  However, given the path towards recovery has simply meant trying to get back to standard operational levels for many, it was just a matter of time before the sector would be back in black.    

"Leading the way were the key indices of production and new orders (both at 58.6).  Like the main result, these were at the highest level of expansion since April 2018. 

Overall, we should remain cautious that one expansionary result does not represent a trend given ongoing offshore uncertainty around COVID-19.  A consistent trail of new orders over the coming months would go a long way towards ensuring the second half of 2020 is better than the first.  

BNZ Senior Economist, Doug Steel said that “New Zealand’s PMI average through April and May was at the bottom when looking across usual comparator countries.  But with the country at alert level 1, activity has picked up. Long may it continue".

View the Time Series Data


Main Indicies

Regional Results

Manufacturing Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

A Spark

We openly discussed in last month’s commentary that the Performance of Manufacturing Index (PMI) had the potential to show ‘a bit more spark’ in June. And it has.  The PMI lifted to an expansionary 56.3 in June from a sombre 39.8 in May and a dreadful 26.0 back in April.
Read more

Reopening In A Very Tough Quarter

The reopening of the economy post-lockdown, including the move to COVID alert level 1 on the night of 8 June, has seen more activity take place compared to prior months.  But June’s positive result is not enough to rescue the second quarter of the year overall, through which the PMI averaged a very weak 40.7.
Read more

Employment Still Falling

All major PMI components printed above their respective long-term averages in June, except for employment. At 48.5, not only was the employment index below its long-term average of 50.5 but it was also sub-50 indicating the manufacturing sector continues to shed staff.
Read more

Turning Tables

NZ’s PMI is now higher than other countries we often compared ourselves to. This follows a period of NZ underperformance. The turnaround tallies with suggestions that NZ is enjoying more freedoms than many elsewhere after undergoing COVID restrictions that were tighter than most.
Read more

View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesJune
2019
Feb
2020
Mar
2020
Apr
2020
May
2020
Jun
2020
BNZ - BusinessNZ PMI 51.354.137.326.039.856.3
Production51.354.731.219.138.158.6
Employment 48.351.144.941.339.248.5
New Orders52.756.536.617.439.558.6
Finished Stocks56.552.944.537.441.556.6
Deliveries48.553.239.225.441.157.3

View the Time Series Data

BNZ - BusinessNZ PMI Time Series

July 2016 – June 2020

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
1 Jul 2020

47.8

International PMI