BNZ – BusinessNZ Performance of Manufactoring Index
55.6 - January Value
+4.5 – Monthly change
Expanding – Faster rate
New Zealand's level of manufacturing expansion rose in January after experiencing lower expansion for the previous month, according to the BNZ - BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for January was 55.6 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 4.5 points higher than December, although it did not see a return to levels of expansion typically seen during 2017.
BusinessNZ's executive director for manufacturing Catherine Beard said that while it was positive to see the PMI rebound somewhat after a sizeable drop in expansion during December, comments from manufacturers provide another angle to the story.
"The proportion of positive comments in January (50.7%) was down by a fair margin compared with December (63.3%) and November (65.1%). While seasonal factors such as Christmas and holidays are typically mentioned around this time of year, those outlining negative comments have also focussed on recent uncertainty that has led to softening activity and a slow start to the year for some".
BNZ Senior Economist, Craig Ebert said that "while the NZ PMI has led the world for the last 5 years, the global PMI has now pretty much caught up. This suggests the international investment cycle is clicking into place and promises to self-sustain the global economic expansion. This should be good for manufacturing industries, New Zealand included".
Like a professional footballer, New Zealand’s Performance of Manufacturing Index (PMI) has recovered remarkably well after taking a dive. The dive, of course, was to a barely-expansive level of 51.1 in December, after riding high in November, at 57.6.
Local manufacturers didn’t seem to have the luxury of deferring decisions on hiring labour, however. The employment index of the PMI pressed forth at 52.5 in January.
While January’s PMI outturn is obviously encouraging we remain conscious of vulnerabilities on the food processing side of things. This, in turn, relates to the weather.
While the NZ PMI has led the world for the last 5 years or so, the global PMI has now pretty much caught up. The latter was a seasonally adjusted 54.4 in January – hardly different to the 54.5 result of December, which was, in fact, the swiftest since 2011.
PMI Time Series Table
BNZ - BusinessNZ PMI Time Series
January 2013 – January 2018
J.P. Morgan Global Manufacturing
1 February 2018