Rock bottom – PMI 15 May 2020 26.1April-11.9Monthly Changecontractingfaster rate Catherine Beard Executive Director, ExportNZ & ManufacturingNZ View profile New Zealand's manufacturing sector fell to its lowest level of activity since the survey began, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).The seasonally adjusted PMI for April was 26.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was down 11.9 points from March*. The previous low point had been 36.1 in November 2008, which was due to the Global Financial Crisis.BusinessNZ's executive director for manufacturing Catherine Beard said that given part of March and almost all of April was in complete lockdown for the country, a significant fall in manufacturing activity was fully expected. The key sub-indices of Production (19.8) and New Orders (17.8) were particularly hit hard. "Looking at comments from respondents, only two words stand out, namely COVID-19 and lockdown, with 89.7% of respondents outlining negative comments". "With level 3 in place since 28 April, along with the country entering level 2 on 14 May, a greater sense of normality will hopefully be present for most manufacturers during the second half of May. This should see a return to relatively stronger levels of activity. However, to what extent the sector climbs out of rock bottom will largely depend on the ability to get new orders up and running, along with revised factory floor processes for production". BNZ Senior Economist, Doug Steel said that “recent negative PMI readings from around the world illustrate the widespread economic pain being felt. New Zealand’s April reading is lower than other countries we often compare ourselves to, which tallies with suggestions that NZ restrictions have been tighter than many”.*Due to not running the March 2020 PMI because of COVID-19, the March figures have been obtained by taking an average of both the actual combined February 2020 and April 2020 values. The results have then been seasonally adjusted.View the Time Series Data Main Indicies Regional Results Doug Steel Senior Economist, BNZ ShutdownApril’s Performance of Manufacturing Index (PMI) was never going to be anything but awful. And so it is. With various lockdown rules in place through the month, the seasonally adjusted index fell to its lowest ever level at 26.1.Read more Employment SupportedNew orders recorded the weakest result of all sub components, with a previously-unthinkable reading of 17.8. Production was similarly feeble at 19.8. These are simply dreadful readings representing a sudden stop across much of the manufacturing sector. Needless to say, they are miles below normal.Read more DisorderLooking at prior relationships, a slump in new orders of the degree seen in April would be consistent with core manufacturing sales dropping by about a third. But we’d caution against drawing any precise conclusions when such extreme movements take place.Read moreGlobal PainRecent negative PMI readings from around the world illustrate the widespread economic pain being felt. NZ’s April reading is lower than other countries we often compare ourselves to, which tallies with suggestions that NZ restrictions have been tighter than many.Read more View full BNZ Manufacturing Snapshot PMI Time Series TableThe results are seasonally adjusted. National IndiciesApr2019Dec2019Jan2020Feb2020Mar2020Apr2020 BNZ - BusinessNZ PMI 53.148.748.753.738.026.1 Production51.447.848.854.531.419.8 Employment 51.749.546.751.144.941.2 New Orders53.349.949.256.136.617.8 Finished Stocks53.052.050.252.744.638.0 Deliveries57.749.146.752.938.525.8 View the Time Series Data BNZ - BusinessNZ PMI Time Series July 2016 – April 2020 International ResultsJ.P. Morgan Global Manufacturing PMITM 4 May 202039.8 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 Doug Steel, 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