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Manufacturing sector a consistent achiever

14 March 2014

Consistent achiever

New Zealand’s manufacturing sector remains at a consistent level of solid expansion, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for February was 56.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). The sector has now been in expansion for 18 consecutive months, with the last five months in a tight expansionary band between 56.0 and 56.9.

BusinessNZ’s executive director for manufacturing Catherine Beard said that the PMI is currently going through one of its most stable periods of expansion since the survey began.

“The last six months of manufacturing expansion have remained at the 56 point value, which represents a very solid level of activity. Although new orders slipped somewhat in February, production remains buoyant, while employment has shown more positive growth for two of the last three months.”

BNZ senior economist Craig Ebert remarks on the real news in the latest PMI – its employment index, which is close to a record high for this sector since 2003. “This is evidence that the economic upswing is gaining momentum, spreading across industries and fully radiating into the labour market.”

Four of the five seasonally adjusted main diffusion indices continued to be in expansion during February. Production (58.9) produced the highest level of expansion for the first time since July 2013, as new orders (56.9) slipped to its lowest level since June 2013. Employment (54.4) rose 3.2 points to record its second highest level since May 2013. Deliveries of raw materials(58.1) was similar to January, while finished stocks (49.2) increased slightly from the previous month.

All four regions were in expansion during February. In the North Island, the Northern region (52.9) slipped 0.2 points from January, and its lowest level of activity since April 2013. In contrast, the Central region (57.3) picked up from two identical sub-50 monthly values. In the South Island, the Canterbury/Westland region (53.7) picked up 0.7 points from January, while the Otago-Southlandregion (61.7) rose 5.3 points.

Click here to view the February PMI.
Click here to view seasonally adjusted & unadjusted time series


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