Employment activity reached its highest level as the manufacturing sector continued to show stronger expansion during October, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for October was 59.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 0.8 points higher than September, and the highest result recorded so far for 2014.
BusinessNZ’s executive director for manufacturing Catherine Beard said that the PMI has continued to build momentum over the last five months.
“While the month of May represented the lowest value recorded for the survey so far in 2014, a run of steady and ongoing increases in activity since then has led to the survey now slightly below the 60 point mark for expansion.
“While all diffusion indices are in expansion, the fact that employment is at its highest ever level since the survey began in 2002, provides another boost in the arm for the sector. In addition, the proportion of positive comments from manufacturers (68.7%) was well up on results from previous months. This all bodes well for a healthy end to 2014.”
BNZ senior economist Doug Steel says, “New Zealand’s labour market continues to strengthen with annual employment growth of 3.2% and the unemployment rate falling in the year to September. Today’s PMI results suggest more improvement is likely in the final quarter of 2014.”
All five seasonally adjusted main diffusion indices were again in expansion during October. Production (62.5) led the way, with its highest result since July 2013. New orders (61.8) rose 1.7 points to remain above the 60-point mark, while employment (57.5) recorded its highest ever result since the survey began in 2002. Deliveries (56.6) eased from its level of activity in the previous month, while finished stocks (51.5) also experienced a lower level of activity from September.
All four regions were again in expansion during October. In the North Island, the Northern region (60.2) climbed back over the 60-point mark to show strong activity for the month. The Central region (56.6) continued to build on its momentum with activity at its highest since March 2014. In the South Island, the Canterbury/Westland region (61.6) increased 5.7 points, while the Otago-Southland region (70.6) continued its momentum from the previous month.