New Zealand’s manufacturing sector slipped further into contraction during July, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for July was 46.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was the lowest level of activity since August 2021 when the country was last in lock-down, and well below the long-term average activity rate of 52.9.
BusinessNZ’s Director, Advocacy Catherine Beard said that the July result showed very little signs of potential improvements for the sector as a whole.
“While New Orders (45.0) did improve slightly from June, Production (42.9) dropped to its lowest result since August 2021. Employment (42.9) fared even worse, down to its lowest level of activity since May 2020. Only Finished Stocks (52.6) remained in positive territory.
The proportion of negative comments stood at 72% in July, which was very similar to June (74.5%), but up on May (66.7%) and April (70.3%). Manufacturers noted general market uncertainty, rising costs, and weather affecting demand as the key negative influences on activity for July.
BNZ Senior Economist, Doug Steel stated that “the July result was the fifth consecutive monthly sub-50 reading and, outside of Covid lockdown periods, the lowest reading since the GFC days back in June 2009”.
