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NZ manufacturing activity lifts in January but fewer positive comments

Friday 16th February 2018

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New Zealand's manufacturing activity lifted in January although fewer positive comments from businesses point to ongoing caution. 

The BusinessNZ-Bank of New Zealand performance of manufacturing index rose 4.5 points to a seasonally adjusted 55.6 in January. It continued its run of expansionary readings above 50 in every month since October 2012, although it did not see a return to levels of expansion typically seen during 2017.

Businesses have been jittery since the formation of the Labour-led government as they wait to see what impact new policies will have on things like industrial relations, the labour market and trade as well as the property market. 

BusinessNZ’s executive director for manufacturing Catherine Beard said that while it was positive to see the PMI rebound somewhat after a sizeable drop in expansion during December, comments from manufacturers provide another angle to the story. New Zealand's manufacturing activity fell to a five-year low in December. 

“The proportion of positive comments in January (50.7 percent) was down by a fair margin compared with December (63.3 percent) and November (65.1 percent). While seasonal factors such as Christmas and holidays are typically mentioned around this time of year, those outlining negative comments have also focussed on recent uncertainty that has led to softening activity and a slow start to the year for some," she said. 

All five of the sub-indices lifted with production up 1.4 points to 54.9, employment up 1 point to 52.5, new orders up 5.9 points to 55.6,  finished stocks up 1 point to 53.1 and deliveries up 5.5 points to 55.3. 


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