NZ manufacturing perks up, stays in contraction: PMI

Thursday 14th May 2009

New Zealand manufacturing activity edged higher last month, while remaining in contraction for the 12th straight month.

Manufacturing improved by 1.8 points to 43.7 in April from March, according to the Bank of New Zealand–Business NZ Performance of Manufacturing Index. A reading below 50 indicates a contraction. The reading has gained for two straight months.

“While not exactly positive end points, these are encouraging trends,” said Craig Ebert, economist at Bank of New Zealand. Still, he said, the economic and financial backdrop “remains problematic.”

Economists are wary to call an early end to the biggest global economic slump since WWII. The Standard & Poor’s 500 rallied 34% between March 9 and May 11 before sliding this week on concerns the optimists were getting ahead of themselves in seeing the so-called green shoots of recovery. The S&P 500 dropped 2.7% yesterday after U.S. retail sales unexpectedly fell.

All five of the seasonally adjusted diffusion indexes in the PMI were in contraction in April, according to the survey.

The PMI jobs indicator gained 5.8 points from a record low to 44.8, while the reading for production climbed to 42.7, the first time it has been above 40 this year.

New orders rose to 42.8 from 40.6, while finished stocks slipped 1.3 points to 46.3. Deliveries of raw materials rose to 43.6 from 40.9.

The JPMorgan Global PMI for April rose to a seven-month high 41.8. The PMI for the U.S. rose to 40.1, the first time above 40 since September. The Australian PMI slipped to 30.1 from 33.4.

Businesswire.co.nz

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