Sharechat Logo

Manufacturing expanded in March but fell from February

Thursday 12th April 2012

Text too small?

Manufacturing activity remained in positive territory in March, even though it shed some of February's very strong gains, according to the BNZ-BusinessNZ performance of manufacturing index (PMI).

The PMI stood at 54.5 points in March in seasonally adjusted terms, down 3.2 points from the February reading but still the second highest result since May 2011 and the third highest since June 2010. It compares with 49.7 points in March last year.

“The remarkable thing about this particular one is we did expect it to fall because the previous month was surprisingly high,” said Stephen Toplis, head of research at BNZ.

“But the fact that it's stayed quite positive is a really good sign.” A reading above 50 points indicates activity is expanding.

Only one of the five main parts of the index, finished stocks, read below 50 points at 49.1 points.

Toplis said that's actually a positive sign because previous indications were that manufacturers had been over-stocked.

Unadjusted results by region indicated activity around the country was broadly similar in March to February's levels with the Northern region falling 1.4 points to 51.6 and the Canterbury/Westland region falling the same amount to 50.4.

The Central region strengthened to 62.1 points while the only region still showing a contraction, Otago/Southland at 48.8, still showed an improvement.

Among the sub-groups, food, beverage and tobacco improved significantly to 63.1 points and petroleum, coal, chemical and associated products at 53.2 and metal product manufacturing at 54.7 were at similar levels to February. Machinery and equipment manufacturing dipped to a still expansionary 54.7 points.

BNZ economist Doug Steel said if the index had returned to January's 51 point level or worse, it would have indicated the February reading was “a flash in the pan.”

The actual reading fits his view that the manufacturing sector will make a decent contribution to overall March quarter GDP growth, Steel said.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar bounces off four-year low; seen weaker
Vector urges regulatory change in low-interest-rate environment
Vector urges regulatory change in low-interest-rate environment
Govt moves against surprise Supreme Court 'black hole' tax ruling
Qantas CFO Race Strauss to join A2 Milk as CFO
Climate Committee seeks data, evidence for future carbon budgets
Spark's wobbly world cup start raises stakes for live-streaming - analysts
An algorithm dunnit: anatomy of Spark's mid-match surrender
Stanley-Tallwood liquidator cuts deal over KiwiBuild development
Stanley-Tallwood liquidator cuts deal over KiwiBuild development

IRG See IRG research reports