Manufacturing contracts for 11th straight month

Thursday 16th April 2009

New Zealand manufacturing activity contracted for the 11th month in a row, with little sign that the sector is managing to pull out of the slump, as companies eliminate jobs and curb output.

Manufacturing improved by 1.8 points to 40.7 in March from February, according to the Bank of New Zealand-Business NZ Performance of Manufacturing Index. A reading below 50 indicates a contraction.

The monthly PMI survey mirrors the Quarterly Survey of Business Opinion, released last week, which showed manufacturers reporting a drop in orders. The PMI jobs indicator sank to a record-low 38.7, while the reading for production was a miserly 37.1, up from a record 34 in the previous month.

"New Zealand's manufacturing industry remains in clear distress," said Craig Ebert, economist at Bank of New Zealand.

All five of the seasonally adjusted diffusion indexes in the PMI were in contraction in March, according to the survey. New orders were at 40.6, while finished stocks were at 47.9. Deliveries of raw materials were at 40.9.

The JPMorgan Global PMI for March rose to its highest level in five months, at 37.2. The PMI for the US reached 36.3, the highest since November, while the Australian PMI was little changed at 33.4.

By Jonathan Underhill

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