New Zealand's manufacturing sector showed some signs of recovery, albeit off a very low base, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for May was 39.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was up 13.8 points from April, and higher than the level of activity recorded in March.

BusinessNZ's executive director for manufacturing Catherine Beard said that given half of May was at alert level 2, this provided firms with a greater ability to boost production and new orders, which was seen in those two sub-indices showing the strongest increases from the previous month (sitting at 38.4 and 40.0 respectively).  In contrast, employment (39.4) took another hit.  With the wage subsidy to end soon for many businesses, a soft employment result in the months ahead may make the road to recovery that bit longer. 

"Looking at comments, the lift in overall activity levels also saw the proportion of positive comments increase from 10.3% in April to 28.5% in May."  

BNZ Senior Economist, Craig Ebert said that “still, a negative tone remains evident in the fact that, even with its bounce in May, the NZ PMI merely got back to the sort of levels in sank to during the 2008/09 recession."

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