Sluggish start to the year – PMI

14 Feb 2020

49.6

January

+0.4

Monthly Change

contracting

slower rate

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Catherine Beard

Executive Director,, ExportNZ & ManufacturingNZ

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New Zealand's manufacturing sector experienced a second consecutive month in contraction, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for January was 49.6 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  While this was up 0.4 points from December, the sector remains in contraction.

BusinessNZ's executive director for manufacturing Catherine Beard said that the mixed results for 2019 have continued to spill over into 2020.

"Looking at the key sub-index values, new orders (50.6) is still only just managing to keep its head above water, while production (49.9) has now been in contraction for three consecutive months.  Employment (46.9) also took a hit to reach its lowest mark since July 2019."

"The proportion of negative comments in January (52.5%) picked up from December (44.9%).  In terms of the comments made, there were still seasonal effects at play, most notably the Xmas/holiday break.  However, there was also some discussion around uncertainty due to the coronavirus."

BNZ Senior Economist, Craig Ebert said that “in the context of the latest global ructions – this time related to the COVID-19 virus – January’s PMI could arguably be read as a relatively decent outcome. At the same time, it is surely too early for the PMI to capture the economic consequences of the virus".

View the Time Series Data


Main Indicies

Regional Results

Manufacturing Landscape
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Craig Ebert

Senior Economist, BNZ

The PMI

New Zealand’s Performance of Manufacturing Index (PMI) remained close to flat in January. Moving into a new year, but still going nowhere, it posted an index reading of 49.6, from 49.2 in December.
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Global

Of course, it’s also too soon for the latest global PMI to be meaningfully indicating the disruptions from COVID-19. All the same, its January reading was interesting, in that it nudged up to a seasonally adjusted 50.4, from 50.1 in December.
Read more

Detail

With respect to the NZ PMI, at face value it looked as though new orders, at 50.6, were holding their own, while employment – which slipped to 46.9, from 49.6 – was letting the side down.
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Food

One component of the NZ PMI to keep a particularly close eye on over coming months is Food, Beverages and Tobacco – for at least a couple of reasons.
Read more

View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesJan
2019
Sep
2019
Oct
2019
Nov
2019
Dec
2019
Jan
2020
BNZ - BusinessNZ PMI 52.848.852.651.249.249.6
Production50.446.552.349.448.449.9
Employment 52.050.049.948.949.646.9
New Orders52.751.155.953.850.450.6
Finished Stocks54.549.148.849.552.750.5
Deliveries54.747.351.452.450.148.2

View the Time Series Data

BNZ - BusinessNZ PMI Time Series

July 2016 – January 2020

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
3 Feb 2020

50.4

International PMI