Survey results show manufacturing 'turn the corner'

Thursday 16th December 2010

Survey results showing expansion in the manufacturing sector last month has BusinessNZ seeing the industry "turn the corner" after four flat months.

The BNZ-BusinessNZ performance of manufacturing index (PMI) rose to a seasonally adjusted 52.7 in November from 50 in October. A reading above 50 indicates manufacturing is generally expanding.

BusinessNZ executive director for manufacturing Catherine Beard said that while the expansion was modest, it was solid across all the regions and indices measured.

"Having new orders in expansion, (albeit modest expansion) is a good forward indicator of continuing growth," she said.

Manufacturers making positive comments in the survey seemed to be those focused on exporting to the Australian market or having some seasonal factors going their way.

For the first time in about three months positive comments outnumbered negative comments - 53.1% to 46.9%.

BNZ senior economist Craig Ebert said the production component of the PMI had bounced noticeably in November to 55.4, having been in the red through the September quarter.

That, along with a jump in the deliveries component to 57.4, had been instrumental in the overall PMI.

The new orders component had kept edging further to the right side of 50, with a reading of 52.3. Employment was the laggard but had managed to keep the right side of 50, with a reading of 50.7 last month, Mr Ebert said.

With the finished stocks component at 51.3, the latest survey is the first in five months to have all the five sub-indices in expansion.

NZPA

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