Thursday 24th January 2013
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The property market may be taking off, but there is no sign of the manufacturing sector doing the same, according to the latest BNZ-Business New Zealand Performance of Manufacturing Index.
The December PMI was barely in positive territory at 50.1, up 1.3 points from November, but down on the readings in December 2011 and 2010.
BNZ described the overall index as showing "all but no change", saying that when one sub-component was doing better another one was slipping away.
"There is certainly a bit to like in the production index rising to 52.5 from 49.6 in November," BNZ said. A reading above 50 indicates expansion in activity.
But the new orders component slipped to 48.9 from 50.0 in the previous month, raising questions about the durability of demand.
"Such pluses and minuses are littered throughout the December PMI survey across industries, regions and firm size," BNZ said.
"Indeed, this was the story of 2012 as a whole, as no one influence dominated the manufacturing sector."
The flat manufacturing report comes after the latest Quarterly Survey of Business Opinion by the New Zealand Institute of Economic Research indicated the economy was recovering and reports of new records for residential property prices, particularly in Auckland.
The PMI survey shows a decline in inventory, which implies a pickup in demand.
The PMI employment index improved to 49.1 from 48.2 but it may be indicative of employment falling at a slower rather than a sign of outright pickup.
BusinessNZ's executive director for manufacturing, Catherine Beard, said the December result was symptomatic of what manufacturers experienced in 2012.
"Five of the 12 months were in contraction, with only two months (February and May) showing any sufficient levels of expansion.
"However, despite the fairly unexciting result, comments by manufacturers remain more positive than negative," she said.
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