NZ manufacturing slips into contraction in July, first in 3 months
New Zealand manufacturing sector slipped into contraction in July, falling to its lowest level in three months, according to the BNZ-BusinessNZ performance of manufacturing index (PMI).
The PMI stood at 49.4 in July in seasonally adjusted terms, down 0.6 points from the June reading. Compared with previous July readings it's the lowest result since 2008. A reading of 50 separates a contraction from an expansion.
July's PMI was a "bit of a worry" affected by international concerns and the high New Zealand dollar, Craig Ebert, economist at Bank of New Zealand, said in a statement.
Four of the five diffusion indexes in the survey were in contraction in July, with production at 49.6, deliveries at 49.1, finished stocks on 47.5 and employment on 47.7, which was the lowest since October 2009. New orders bucked the trend, with a reading of 52.9.
Unadjusted results showed three of the four regions were in contraction last month, with the Northland region unchanged on 49.3 points, the Canterbury/Westland region on 49.1 and Otago/Southland on 45.8 points. The Central region bucked the trend up 3 points to 50.7 after three months of contraction.
Among the sub-groups, the stand-outs were Petroleum, coal, chemical and associated product on 54 points. Metal product manufacturing remained in contraction even as it fell 5.8 points to 50.8.
Machinery and equipment manufacturing was largely unchanged on 49.8 points from June. Textile, clothing, footwear and leather manufacturing and food beverage and tobacco manufacturing both remained in contraction.
Even as manufacturing declines the proportion of positive comments remained the same on 51.1 percent.
Globally, the JPMorgan Global Manufacturing PMI stood at 48.4 in July, the lowest result in six months, with weaker demand and an ongoing period of inventory adjustment pushing the global manufacturing sector deeper into contraction.
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