Road to recovery – PMI 12 Jun 2020 39.7May+13.8Monthly Changecontractingslower rate Catherine Beard Executive Director, ExportNZ & ManufacturingNZ View profile 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."View the Time Series Data Main Indicies Regional Results Craig Ebert Senior Economist, BNZ The PMINew Zealand’s Performance of Manufacturing Index (PMI) posted a rebound, of sorts, in May. At a seasonally adjusted 39.7 it was still clearly contracting, just not to the extent it was in April, when it was 25.9. That result for April, of course, traversed the most extreme period of lockdown, related to COVID-19.Read more Variation in the DetailsDespite its headline improvement, there was patent variation in the component detail of May’s PMI. By industry, there was a strong theme of primary industry support, with Food, Beverage & Tobacco up at 52.5, Wood and Paper bouncing to 54.5 (from 16.3 in April) and Petroleum, Chemical & Coal up to 52.8 – all unadjusted figures.Read more Looking AheadThis is not normally the forum to talk about the outlook for manufacturing, as the PMI reports on what is happening rather than what firms expect to happen. However, with New Zealand moving down to restriction level-1 on 8 June, there is clearly potential for a bit more spark to show in the June/July results.Read moreEmploymentPerhaps this is why we’re seeing, from the PMI, signs of net job losses coming through already – despite the government’s enormous wage subsidy scheme directed at preserving jobs over the interim?Read more View full BNZ Manufacturing Snapshot PMI Time Series TableThe results are seasonally adjusted. National IndiciesMay2019Jan2020Feb2020Mar2020Apr2020May2020 BNZ - BusinessNZ PMI 50.548.653.838.025.939.7 Production47.948.754.531.219.138.4 Employment 49.046.751.144.841.139.4 New Orders51.249.256.236.716.940.0 Finished Stocks56.850.052.744.237.741.3 Deliveries50.846.753.038.625.241.4 View the Time Series Data BNZ - BusinessNZ PMI Time Series July 2016 – May 2020 International ResultsJ.P. Morgan Global Manufacturing PMITM 1 Jun 202042.4 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 Craig Ebert, 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