Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Manufacturing sentiment stabilises after 'big wobble'

Manufacturing sentiment stabilises after 'big wobble'

Nov. 15 (BusinessDesk) - Bank of New Zealand economists are drawing solace from a move back into positive territory for its closely watched Performance of Manufacturing Index, which was one of the few leading indicators to foreshadow the sharp rise in September quarter unemployment.

Published in conjunction with lobby group Business New Zealand, the PMI clocked in at 50.5 in October, an improvement of two points in September. A score above 50 indicates expansion, while a figure below 50 indicates contraction in activity.

The index fell sharply between May and August, in what can now be seen as an early warning of a sudden deterioriation in economic conditions following a relatively strong start to 2012.

BNZ economist Craig Ebert described the result as cause for "relief" rather than optimism, and "simply giving hope that the sector is stabilising, having been through a rough patch in the preceding few months."

However, while production at a reading of 53, finished stocks at 52.1 and new orders at 50.9 were all in positive territory, the PMI employment indicator was still mildly negative at 49.1, compared with a low point this year of 45.2 in August.

The fifth indicator in the series, deliveries, was also still negative, although it improved to 49.7 in the October survey.

While the employment index was "not exactly positive", Ebert said it supported the BNZ's view that the unemployment spike to 7.3 percent of the workforce seen in the September quarter was "more in the nature of a big wobble than the start of some rot."

At the same time, elements in the PMI were still "bouncing around like crazy."

"Until we see a more concerted and consistent pulse in the PMI we'll stay reticent about the manufacturing sector's growth prospects," said Ebert.

On a regional basis, the PMI shows the central region, covering the bottom half of the North Island and upper South Island showed the greatest resilience, with a reading of 57.6, followed by Otago/Southland at 54.0, the northern region at 52.1, and Canterbury/Westland weakest at 50.8.

Business NZ's executive director for manufacturing, Catherine Beard, said the PMI had emerged from a four month contraction, the longest consecutive monthly fall since 2009.

While a sharp jump in the number of positive anecdotal comments from manufacturers was welcome, "new orders remain historically low, while those employed in manufacturing have been in decline for five consecutive months," she said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Pre-Budget: Computer Emergency Response Team, Assemble!

John Key told the country's first ever Cyber Security Summit in Auckland that the government had earmarked funding set up a national Computer Emergency Response Team to help prevent and act on cyber incidents in partnership with the private sector and other organisations. More>>

ALSO:

Job Cutter Goes: Mark Weldon To Step Down As MediaWorks CEO

“When I joined MediaWorks in August 2014, I had a mandate to lead a significant change programme to bring the business back from receivership into a position where it could once again be a strong competitor in the market, with a sound and sustainable future. It was a big brief, laden with inherent challenges, but I took it in good faith and have dedicated myself fully to the goal since." More>>

ALSO:

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news