New Zealand’s manufacturing sector showed further expansion in July, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for July was 58.8 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was up 2.6 points from June, and now the highest result since April 2018.
BusinessNZ’s executive director for manufacturing Catherine Beard said that in a similar vein to the last month, the path towards recovery continues for many manufacturers through increased orders and production in full swing.
“This is obviously a welcome outcome given the halt in any activity for many over lockdown. However, we should be careful not to interpret this as a new dawn for the sector, rather a catch-up for many trying to get back to a new sense of normality.”
“While the key indices of new orders (67.4) and production (61.4) showed further expansion, employment (46.5) remained weak and in contraction for the fifth consecutive month.”
BNZ Senior Economist, Doug Steel said that “July’s PMI had firmly set up the idea that manufacturing GDP would bounce back strongly in Q3 after what was surely a very large decline in Q2. The latest virus outbreak calls that into question and adds to the reservations that we already had for growth in Q4.”
