New Zealand's Performance of Manufacturing Index (PMI) slumped to a seasonally adjusted record low of 42.0 in January from 42.5 in December, indicating the manufacturing sector is contracting fast and being hammered by lower demand from a global economy diving into recession.
Any measure from the BusinessNZ-BNZ survey of manufacturing orders, employment intentions, inventories and stocks that shows the PMI below 50 indicates the sector is contracting. It has been below 50 since April last year.
The unadjusted PMI of 37.9 is the first time below 40 in the history of the survey started in 2002 and indicates manufacturers are being thumped despite the big fall in the New Zealand dollar. The seasonally adjusted number is the second lowest on record behind the 35.2 in November (Corrected from earlier version)
This measure of how the global economic downturn is hitting New Zealand suggests the recession here will be longer and will encourage the Reserve Bank to keep cutting the Official Cash Rate.
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