BNZ-Business NZ Performance of Manufacturing Index figures dip slightly but show continued strengthening of the sector

Manufacturing activity levels dipped slightly in March, but the sector continued to grow strongly, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI). 

BusinessNZ’s executive director for manufacturing Catherine Beard said that the first three months of 2013 have got the sector off to a solid start 

“Given it was the first time since early 2011 that we had consecutive monthly expansion across all main sub-indexes, the positive outcome also saw previous elements of the sector that had been previously struggling experience uplift in March,"

BNZ senior economist Craig Ebert said: “The latest PMI, and the manufacturing component of Tuesday’s NZIER Quarterly Survey of Business Opinion, are singing from the same song sheet. It’s not a power ballad, but it’s far from a dirge.”

The BNZ-BusinessNZ PMI is a monthly survey of the manufacturing sector providing an early indicator of activity levels. A PMI reading above 50 points indicates manufacturing activity is expanding; below 50 indicates it is contracting. The main PMI and sub-index results are seasonally adjusted.

In March the PMI dipped to 53.4 from 56 in February. Ebert says this was "given February was so strong".

"At 53.4 now, the PMI is what we’d call solid – and, still, stronger than most every other PMI globally we can think of, including the one for China."

"Comfortably above the breakeven mark of 50, the NZ PMI is consistent with reasonable growth," Ebert says.

"Ongoing momentum was underscored by the fact new orders in the latest PMI turned out to be a seasonally adjusted 55.3 in March. This, following 57.7 in February and 56.0 back in January, suggested maintained support for the idea of increased production ahead. And it looks as though all of this is now beginning to feed into employment, with the PMI component on such, at 51.5, having its head above the waterline for the second month running."