New Zealand’s manufacturing sector saw activity increase in February after a dip in expansion during January, according to the BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for February was 55.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 3.0 points higher than January, and the highest level of expansion since September 2016. Overall, the sector has remained in expansion in almost all months since October 2012.
BusinessNZ’s executive director for manufacturing Catherine Beard said that it was pleasing to see the sector pick up after January’s dip due to mostly seasonal factors.
“While a few respondents continued to outline negative seasonal factors impacting their overall activity levels during February, the 61.7% of positive comments received pointed to increased orders, both at a domestic and offshore level”.
BNZ Senior Economist, Craig Ebert, said “it was good to see the PMI bounce in February. Had it not, we would have become a little apprehensive about the way it was going”.
View PMI Time Series Data
It was good to see New Zealand’s Performance of Manufacturing Index (PMI) bounce in February. Had it not, we would have become a little apprehensive about the way it was going.
February’s PMI is particularly encouraging in suggesting the weak manufacturing result we saw in yesterday’s Q4 GDP report was transitory rather than the start of a genuine struggle.
The local forestry industry is doing well. That said, its activity in the final quarter of 2016 eased from the level it spiked to in Q3.
Supporting New Zealand’s manufacturing sector, in general, has been the recent moderation in the currency. Aided by a resurgent US dollar, NZD/USD (and NZD/CNY, for that matter) has dropped about 5% since early February.
View full BNZ Manufacturing Snapshot