Despite a dip, New Zealand’s manufacturing sector remains in solid expansion, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for April was 55.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 2.8 points lower than March, although similar to results experienced over the last eight months. The sector has now been in expansion for 19 consecutive months, with the first third of 2014 averaging 56.4.
BusinessNZ’s executive director for manufacturing Catherine Beard said although the level of expansion wasn’t as strong as the previous month, activity was still healthy and positive across most of the sub-indices recorded.
“Comments from respondents remained more positive than negative, although a contributing factor to the lower level of expansion that came through was the lower number of working days in April because of the Easter/ANZAC break.”
BNZ economist Doug Steel said, “Despite what looks like a holiday-induced slowdown in April, the trends in the PMI are strong and especially so in employment. Buoyant construction and agriculture sectors look supportive on the demand side.”
Four of the five seasonally adjusted main diffusion indices were in expansion during April. Production (55.3), deliveries (55.3) and new orders (55.2) displayed almost identical levels of expansion, while employment (54.5) returned to levels seen in February. Finished stocks (49.3) were the only index to show any level of contraction, and returned to levels seen in February.
All four regions were again in expansion during April, although differences were evident. In the North Island, the Northern region (53.0) decreased 6.2 points, while the Central region (51.3) fell 6.3 points after consecutive months above 57.0. In the South Island, the Canterbury/Westland region (50.1) only just managed to remain in positive territory, while the Otago-Southland region (57.7) dipped a further 2.1 points.