NZ manufacturing climbs to 2-year high on production, new orders: PMI

Thursday 21st January 2010

New Zealand manufacturing climbed to its highest level in two years in December, led by an increase in production and new orders, underlining the economy’s recovery from recession.

The BNZ-Business NZ Performance of Manufacturing Index rose 1 point to 52.9 last month, seasonally adjusted, the highest since December 2007. Production strengthened to 54.1 and new orders gained to 57.2, also the highest in two years.

The PMI tallies with the results of the Quarterly Survey of Business Opinion, released last week, which showed production picked up in the last three months of 2009. The PMI has recovered from 38.9 in February, having dipped to a record low of 35.1 in November, when the economy was in its fourth quarter of contraction.

“Such forward-looking indicators promise a solid expansion for New Zealand’s manufacturing sector – at least for the near term,” said Craig Ebert, economist at BNZ. Still, “there is no denying the fact that production has a lot to recover from. It’s a big hole to climb out of.”

Three of the five main diffusion indexes registered above 50 in December, the level that separates contraction from expansion. Deliveries of raw materials climbed 2.5 to 52.9, the highest since February 2008.Employment remained in contraction, sinking 1.2 to 48.7, while finished stocks rose 0.8 to 47.5.

New Zealand’s PMI is lagging behind the JPMorgan Global PMI for December, which reached a 44-month of 55. The U.S. PMI had a reading of 55.9 and the Australian PMI was at 48.5 last month.

Businesswire.co.nz

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