Manufacturing under the hammer

Media statement

Manufacturing under the hammer

The Business New Zealand Performance of Manufacturing Index (PMI) for January paints a gloomy picture for manufacturers, the Employers & Manufacturers Association (Northern) says.

“Manufacturers are under the hammer everywhere except in the Waikato/Bay of Plenty,” said Alasdair Thompson, EMA’s chief executive.

“In Northland and Auckland the PMI hit a low of 37.8, well below the national average of 44.1. (Above 50 shows expansion; below 50, contraction).

“This is the lowest the PMI has been in the north since the series began in 2002 and a stark contrast to the 68.0 recorded in November 2004.

“Only in the Waikato/Bay of Plenty are manufacturers expanding with New Orders (58.3) and Employment levels (52.8).

“Sub-indices of the series for other northern manufacturers suggest the bad news will worsen; their PMI for New Orders is 35.4, for Raw Materials, 34.1.

“The plummeting activity is widely attributed to the high New Zealand dollar which is making competition from the unduly low cost of imports in a shrinking market.

“Manufactured exports are holding up amazingly; though many producers are making no margin, they are holding onto markets offshore until our currency more accurately reflects New Zealand’s economic performance.”

ENDS

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