The month of March finished off a healthy quarter of growth for New Zealand’s manufacturing sector, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for March was 53.4 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This followed results of 56.0 in February and 55.1 in January. Across the quarter, this produced an average of 54.8 – the highest March quarter average since 2007.
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.
“It was particularly pleasing to see employment show a second consecutive increase in activity after spending eight of the last previous nine months in decline. Also, metal product manufacturing (55.6) made a welcome return to expansion following seven consecutive months in contraction, mainly due to significant lifts in production and new orders.”
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.”
All five seasonally adjusted main diffusion indices were in expansion for March, and the first time there was consecutive monthly increases across all five indices since the start of 2011. New orders (55.3) led the way for the first time since July 2012.
This was followed by production (53.0), which fell back to levels of expansion seen in December. Employment (51.5) recorded its highest result since May 2012, while both finished stocks (50.9) and deliveries (52.2) both fell back from February levels of expansion.
Expansion was centred on the middle part of the country in March. The Central region (60.9) experienced its third consecutive increase in expansion to record its first post-60 result since March 2012. In comparison, the Northern region (50.7) fell back 2.9 points, but remained in slight expansion.
In the South Island, the Canterbury/Westland region (59.1) recorded its sixth consecutive expansionary result, while the Otago/Southland region (46.8) returned to contraction after a sharp lift in February.