Back to the future – PMI 17 Sep 2021 40.1August-22.1Monthly Changecontractingpreviously expanding Catherine Beard Director, Advocacy BusinessNZ View profile New Zealand's manufacturing sector returned to contraction on the back of another nationwide lockdown, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).The seasonally adjusted PMI for August was 40.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 22.1 points lower than July, and similar to the result recorded in May 2020.BusinessNZ's executive director for manufacturing Catherine Beard said that the August value came as no surprise given what we had seen during the previous national lockdown. "Employment (54.5) managed to keep its head above water, but all other sub-index values were in contraction with Production (27.7) the hardest hit. Although manufacturers outside of Auckland have returned to alert levels that allow business operations to restart, any moves towards the sector getting back into expansion will ultimately depend on how soon Auckland can also return to lower alert levels."BNZ Senior Economist, Doug Steel stated that “while many anticipate a bounce in activity as the country progresses down alert levels (all going well on the Covid front), today’s PMI clearly demonstrates the economic pain being felt. This should not be underestimated, even if there is hope for the future. GDP and manufacturing output are expected to fall heavily in Q3. It is something of a reality check in the afterglow of yesterday’s very strong Q2 GDP outcome."View the Time Series Data Main Indicies Regional Results Manufacturing Snapshot Doug Steel Senior Economist, BNZ Shutdown Pain, Some HopeEverybody knew that economic activity was going to suffer when the country entered another Covid alert level 4 lockdown in mid-August. It is now about assessing the degree of damage as more indicators come in. On cue, the Performance of Manufacturing Index (PMI) slumped to 40.1 in the month from a very strong 62.2 in July. That represents real pain, with the production component unsurprisingly falling the most, to a dreadful 27.7. For many, production stops in lockdown. Granted, at 40.1, the PMI is not as low as the extremes it got to in last year’s level 4 lockdown (26.0). However, it is in the vicinity of results around that time. Even more so, regards the production component and considering only about half of August 2021 was lockdown affected. Read more View full BNZ Manufacturing Snapshot PMI Time Series TableThe results are seasonally adjusted. National IndiciesAug2020Apr2021May2021Jun2021Jul2021Aug2021 BNZ - BusinessNZ PMI 51.458.158.560.162.240.1 Production53.063.664.763.063.927.7 Employment 49.453.052.456.557.954.5 New Orders54.960.963.562.963.744.4 Finished Stocks50.355.053.457.256.846.1 Deliveries48.952.953.654.456.333.6 View the Time Series Data BNZ - BusinessNZ PMI Time Series January 2018 – August 2021 International ResultsJ.P. Morgan Global Manufacturing PMITM 1 Sep 202154.1 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 BusinessNZ RAT Suppliers Guides & Tools BusinessNZ RAT Suppliers RATs for non-critical business, agencies and organisations BNZ - BusinessNZ PMI Time Series Data View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PMI Sponsor StatementBNZ 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, BusinessNZ 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