BNZ - BUSINESSNZ PERFORMANCE OF MANUFACTURING INDEX … · BNZ Senior Economist, Craig Ebert, said “there weren’t any significant jags in the main component detail of the PMI

Catherine BeardExecutive DirectorManufacturingNZ

12 May 2017

“The April value for new orders (62.4) was only slightly down from the March value, with the combined result of the two months the highest for new order expansion since 2004. While production (56.9) dipped in terms of expansion, the remaining indices remained either stable or increased slightly from March”.

“Mirroring the overall result, the proportion of positive comments also dipped somewhat from 67.2% in March to 64.7% in April.

BNZ Senior Economist, Craig Ebert, said “there weren’t any significant jags in the main component detail of the PMI for April, leaving them all looking good. Overall, April’s PMI was another deserving of a big tick”.

While New Zealand’s manufacturing sector saw expansion in activity soften slightly in April, the sector remains in healthy territory, according to the BNZ - BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for April was 56.8 (a PMI reading above 50.0 indi-cates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.2 points lower than March, but still the second highest value since September 2016. Overall, the sector has remained in expansion in all months since October 2012.

BusinessNZ’s executive director for manufacturing Catherine Beard said that the fundamentals of expansion in the sector remain on track.

In gear

View PMI Time Series Data

BNZ - BUSINESSNZPERFORMANCE OFMANUFACTURINGINDEX

56.8 -1.2 expandingApril Value Monthly Change Slower rate

Construction To be sure, the indicators around construction remain generally upbeat. However, the technical picture around its activity for the March quarter has a few clouds about it.

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Title The Reserve Bank was right yesterday, in stating that “Global economic growth has increased and become more broad-based over recent months.” The JP Morgan IHS Markit Global Manufacturing PMI supported this.

Read more →

The PMI New Zealand’s Performance of Manufacturing Index (PMI) remained strong in April. It chimed in with a seasonally adjusted 56.8, from 58.0 in March – making the low point back in January, of 53.2, seem but a distant concern.

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Employment The other component detail that was encouraging was regards staffing. April’s PMI index on employment was 53.0. This was about as robust as it was in March (53.5) and so still securely above its long-term average, of 50.5.

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Manufacturing Snapshot

Craig EbertSenior Economist

View full BNZ Manufacturing Snapshot

Main Indices Regional Results

Production

Employment53.0

Deliveries54.6

New Orders62.4Finished Stocks

53.8

55.7

52.0

52.8

49.7

56.9

January 2012 - April 2017

BNZ - BusinessNZ PMI Time Series

National Indices Apr2016

Dec2016

Jan2017

Feb2017

Mar2017

Apr2017

BNZ - BusinessNZ PMI

Production

Employment

New Orders

Finished Stocks

Deliveries

Results are seasonally adjusted

PMI Time Series Table

View PMI Time Series Data

54.654.054.353.354.657.1

53.852.855.651.052.152.7

62.463.259.053.852.960.8

53.053.551.552.151.750.6

56.960.057.749.157.658.8

56.858.055.753.254.556.7

Level 6, JacksonStone House, 3-11 Hunter Street, Wellington 6140+64 4 496 6444 | [email protected]

[email protected]

Stephen Summers:

Technical Comment

04 474 6799

Craig Ebert:

04 496 6560

Catherine Beard:

For media comment, contact:

Media CommentSponsor StatementBNZ is delighted to be associated with the Performance of Manufacturing Index (PMI) and BusinessNZ.

The association brings togetherthe significant experience of leading business advocacy bodyBusinessNZ, and business financespecialist BNZ.

We look forward to continuing ourassociation with BusinessNZ and associated regional organisations, and to playing our part in theongoing development of the NewZealand manufacturing sector.

52.82 May 2017

J.P. Morgan Global Manufacturing PMITM

International Results

USA

Australia

Eurozone

UK

China

Japan

NZ56.8

52.854.2

51.2

59.2

56.8

52.8

The PMI

New Zealand’s Performance of Manufacturing Index (PMI)

remained strong in April. It chimed in with a seasonally

adjusted 56.8, from 58.0 in March – making the low point

back in January, of 53.2, seem but a distant concern. Nor

were there any significant jags in the main component

detail, so leaving them all looking good as well. In

particular, new orders were still leading from the front,

with an index reading of 62.4, while production itself was

reasonably expansive, at 56.9. The positivity was less

uniform on the basis of industry type, and by way of

regional breakdown. However, overall, April’s PMI was

another deserving of a big tick.

Employment

The other component detail that was encouraging was

regards staffing. April’s PMI index on employment was

53.0. This was about as robust as it was in March (53.5)

and so still securely above its long-term average, of 50.5.

This, in turn, suggests that the recent improvement we

saw in the Household Labour Force Survey measure of

manufacturing employment will be sustained. In the

March quarter of 2017 it was up 6.0% on the same

quarter a year ago. This is after a soft patch through last

calendar year, during which it fell 5.5%. Over this period

the PMI employment index turned contractionary (less

than 50) in four out of the twelve months.

Construction

To be sure, the indicators around construction remain

generally upbeat. However, the technical picture around

its activity for the March quarter has a few clouds about it.

In particular, the slump that we witnessed in building

consents late last year (albeit from very strong levels)

points to a significant decline in building activity in Q1. If

so, it would dent GDP growth expectations, perhaps by

way of some manufacturing activity too. A test will come

in the Q1 Building Work Put in Place report. This is due 6

June and maps construction GDP very well. Ahead of this,

there are the Q1 ready-mixed concrete statistics to check

out. These are scheduled for release 17 May.

Global

The Reserve Bank was right yesterday, in stating that

“Global economic growth has increased and become

more broad-based over recent months.” The JP Morgan

IHS Markit Global Manufacturing PMI supported this. It

maintained a decent pulse in April, with 52.8, having gone

close to flat over the first half of last year. This report went

to on say that “Price pressures stayed elevated in April.

Although rates of increase in average input costs and

output charges both eased further from recent highs, they

remained above the respective long-run averages.” As for

the RBNZ outlook for global inflation it described this as

broadly subdued.

Maintained Momentum

A Jobs Rebound

Flying Through a Q1 Air Pocket?

A Truly Global Movement

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