The manufacturing sector experienced its fourth consecutive increase in expansion levels during September, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for September was 58.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.1 points higher than August, and the second highest result recorded so far for 2014.
BusinessNZ’s executive director for manufacturing Catherine Beard said that the continued upwards track of the overall result was encouraging for the sector.
“Although the start of 2014 produced some healthy expansion results, activity levels recorded during the middle of the year were at a more moderate pace. The fact that the last two months have shown strong growth bodes well for the manufacturing sector as we enter the last quarter of the year.”
BNZ Senior Economist Craig Ebert said “A falling trend in the NZ dollar will help manufacturers’ export revenue but will also create pressure on import costs and the servicing of any unhedged foreign-currency debt.”
All five seasonally adjusted main diffusion indices were in expansion during September. Deliveries (62.4) led the way, with its highest result since July 2013. New orders (60.0) rose 1.5 points, while production (59.3) dropped 1 point, although still showing very healthy levels of activity. Finished stocks (58.1) recorded its highest value since the survey began in 2002, while employment (56.0) rose another 2.0 points.
All four regions were in expansion during September. In the North Island, the Northern region (58.9) decreased 1.7 points after a large increase in expansion during August. The Central region (53.5) recovered from consecutive months in contraction to record its highest value since May. In the South Island, the Canterbury/Westland region (55.9) rose 1.2 points, while the Otago-Southland region (65.4) continued its upwards trend with a strong result for September.