Back to the future – PMI

17 Sep 2021

40.1

August

-22.1

Monthly Change

contracting

previously expanding

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Catherine Beard

Executive Director, ExportNZ & ManufacturingNZ

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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."

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Main Indicies

Regional Results

Manufacturing Landscape
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Doug Steel

Senior Economist, BNZ

Shutdown Pain, Some Hope

Everybody 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.
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View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesAug
2020
Apr
2021
May
2021
Jun
2021
Jul
2021
Aug
2021
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

July 2016 – August 2021

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
1 Sep 2021

54.1

International PMI