NZ manufacturing dips in March, remains in expansion as employment falls

Thursday 16th April 2015

New Zealand manufacturing activity fell in March, while remaining in expansion, although employment contracted and new orders slowed.

The BNZ BusinessNZ performance of manufacturing index fell to a seasonally adjusted 54.5 from 56.1 in February. The index has been in expansion, at a level above 50, for 30 consecutive months.

The PMI survey comes after the release this week of the New Zealand Institute of Economic Research's quarterly survey of business opinion, which showed a net 23 percent of firms expect general business conditions to improve, down from a revised 24 percent in the previous quarter and consistent with moderating growth. The QSBO survey showed a net 24 percent of manufacturers were upbeat, an improvement from 19 percent three months earlier.

"Both the PMI and QSBO show New Zealand's manufacturing sector remaining in relatively good heart," said Bank of New Zealand economist Craig Ebert.

Of the five diffusion indexes that make up the PMI, only production rose - to 55.1 from 52.6. Employment sank to 49.5 from 52.3, the second time in four months it has contracted, while new orders slipped to 57.4 from 61.4. Finished stocks fell to 53 from 54.2 and deliveries declined to 54.9 from 58.

BusinessNZ manufacturing executive Catherine Beard said comments from respondents remained more positive than negative at 60 percent to 40 percent, although a number cited the negative influence of a high New Zealand dollar, which rose back above 99 Australian cents yesterday and was recently at 98.84 cents.

BusinessDesk.co.nz

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