Flat end to year – PMI

22 Jan 2021

48.7

December

-6.0

Monthly Change

contracting

previously expanding

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Catherine Beard

Executive Director, ExportNZ & ManufacturingNZ

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New Zealand's manufacturing sector experienced contraction for the last month of 2020, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for December was 48.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was down 6.0 points from November, and the lowest level of activity since May.

BusinessNZ's executive director for manufacturing Catherine Beard said that after six consecutive months in expansion, the December result was a disappointing way to end the year.

"While production (51.5) managed to keep its head above water, the other key sub-index of new orders (49.9) failed to record expansion.  Employment (49.9) also fell just below the 50.0 point mark, while finished stocks (45.9) and deliveries (44.5) both fell well into contraction."

"Interestingly, the December value was the same as the overall average result of 48.7 for 2020.  While seven of the twelve months saw expansion in the sector, the effects of COVID-19 and the subsequent lock-down saw a dramatic fall in activity during the first half of 2020 that brought the overall average down."   

BNZ Senior Economist, Doug Steel said that “the PMI’s three-month moving average sits at an expansionary 51.8, albeit below its long-term average of 53.0. This all suggests some expansion in the final quarter of last year, but the softer December month suggests some caution heading into the New Year."

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Main Indicies

Regional Results

Manufacturing Landscape
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Doug Steel

Senior Economist, BNZ

End of Year Dip

December’s Performance of Manufacturing Index (PMI) slipped to 48.7. This is a bit disappointing, although not completely surprising given it did follow six consecutive months being above the expansionary 50 mark including an above-average reading of 54.7 in November.
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Patchy

It is difficult to judge the underlying trends with large swings in component details. Volatility has been more pronounced than usual in the PMI stocks of finished product component.
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Home and Away

Actual performance no doubt depends on what you are selling and to whom. For example, the latest Quarterly Survey of Business Opinion saw NZ manufacturers’ reports of local sales above average for the past three months, while reports of export sales have lifted but remain below average.
Read more

Employment

The PMI employment index eased to 49.9 in December, so back below average and edging back into contractionary territory.
Read more

View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesDec
2019
Aug
2020
Sep
2020
Oct
2020
Nov
2020
Dec
2020
BNZ - BusinessNZ PMI 48.950.953.652.154.748.7
Production47.451.655.951.855.051.5
Employment 49.549.251.552.351.349.9
New Orders50.054.157.253.256.549.9
Finished Stocks52.850.048.849.059.245.9
Deliveries49.847.949.749.151.544.5

View the Time Series Data

BNZ - BusinessNZ PMI Time Series

July 2016 – December 2020

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
4 Jan 2021

53.8

International PMI