New Zealand’s manufacturing sector saw the same level of contraction in December that it experienced the previous month, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for December was 47.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was the same as November, and meant the last quarter of 2022 ended in contraction for all three months.
BusinessNZ’s Director, Advocacy Catherine Beard said that the December result showed little in the way of a move towards expansion, and again mirrored offshore movements. New Zealand manufacturers may need to brace for a challenging 2023 ahead.
“While New Orders (46.1) did show some improvement from November, Finished Stocks (50.1) and Delivery of Raw Materials (48.4) both fell further in December. Production (49.7) remains in a tight band of activity, hovering just below the no change mark, while Employment (48.8) returned to October levels”.
The negative mindset of manufacturers has picked up pace, with the proportion of negative comments at 63.5%. This compares with 58.4% for November, 61.6% for October and 61.5% for September. Labour shortages (skilled and unskilled) was a constant theme, as well as supply chain disruptions.
BNZ Senior Economist, Doug Steel stated that the latest PMI result “broadly fits with the clear decline we already expect for manufacturing GDP in Q4 with further slippage expected in Q1″.
