Mid year blues – PMI

15 Jul 2022

49.7

June

-2.9

Monthly Change

contracting

previously expanding

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Catherine Beard

Director, Advocacy BusinessNZ

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New Zealand's manufacturing sector fell back into contraction for the first time since the most recent national lock-down in August 2021, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for June was 49.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was 2.9 points lower than May, and well below the long-term average of 53.1 for the survey.

BusinessNZ's Director, Advocacy Catherine Beard said that the drop in activity levels for June highlights the fact that the sector remains in struggle street to get back to long-term activity levels.  

"The key sub index values of Production (47.8) and New Orders (47.8) both recorded the same level of contraction, which had a combined negative effect on the overall Index.  As mentioned in previous months, a strong and consistent activity level for both these key sub index values will be the only way to push the PMI towards better results."

Manufacturers continue to have a more negative mindset, with the June result showing 68.5% provided negative comments.  While this was down from 72.7% in May and 70.3% in April, staff retention/shortages continue to plague the sector, as does supply chain issues.

BNZ Senior Economist, Doug Steel stated that “June’s weak PMI adds a note of caution and certainly supports our broader concern about economic growth ahead".

View the Time Series Data


Main Indicies

Regional Results

Manufacturing Snapshot

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Doug Steel

Senior Economist, BNZ

The PMI

The Performance of Manufacturing Index lost momentum in June, slipping to 49.7. This follows nine consecutive readings above the breakeven 50 mark, including May’s 52.6.
Read more

Demand softening

There are changes afoot regards demand. After reaching a recent peak of 58.6 in March, the new orders index has progressively taken material steps downward to now be outright contractionary at 47.8 in June.
Read more

Challenges – old and new

Supply side challenges persist and continue to dominate PMI respondent comments to the negative. Labour shortages remain a frustration for many.
Read more

Growth and policy

We continue to expect a decent bounce in Q2 GDP, following restriction-induced weakness in Q1. But June’s weak PMI adds a note of caution and certainly supports our broader concern about economic growth ahead.
Read more

View full BNZ Manufacturing Snapshot

PMI Time Series Table

The results are seasonally adjusted.

National IndiciesJun
2021
Feb
2022
Mar
2022
Apr
2022
May
2022
Jun
2022
BNZ - BusinessNZ PMI 60.253.453.251.052.649.7
Production62.351.550.349.352.647.8
Employment 56.351.952.249.752.851.2
New Orders63.758.258.654.852.347.8
Finished Stocks57.250.053.253.852.850.0
Deliveries53.852.851.349.655.151.7

View the Time Series Data

BNZ - BusinessNZ PMI Time Series

January 2018 – June 2022

PMI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PMITM
1 Jul 2022

52.2

International PMI