Although improving, activity in New Zealand’s manufacturing sector contracted in November for the ninth month in a row.
The seasonally adjusted performance of manufacturing index (PMI) for September was 46.7, up from 42.9 in October, according to the latest Bank of New Zealand (BNZ) – BusinessNZ performance of manufacturing index.
A PMI below 50 indicates manufacturing is contracting.
BusinessNZ’s director, advocacy Catherine Beard said that while the November result put an end to five months of decline, the sector needs work to be back into expansion.
“The key sub-index measure of production remains stubbornly low,” Beard said.
At 43.6, production has declined and new orders at 47.7 show weak activity.
Employment (47.9) showed a small improvement and finished stocks (50.7) was the only sub-index expanding.
BNZ senior economist Craig Ebert said at the heart of the recent poor run has been the PMI's production index.
He said at its current level, it’s still 10 index points below its long-term average.
Yesterday's gross domestic product figures showed New Zealand's economy slumped in the September quarter.
“All goods-producing industries were down this quarter, led by a fall in manufacturing,” Stats NZ national accounts industry and production senior manager Ruvani Ratnayake said.
