Once more the statistics don’t support the opposition’s manufactured manufacturing crisis:
The manufacturing sector remains in expansion mode, despite some aspects of the results that need to be watched closely in the months ahead, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for June was 53.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 0.7 points higher than May, with the sector now being in expansion for 21 consecutive months.
BusinessNZ’s executive director for manufacturing Catherine Beard said that the slight lift in expansion levels was obviously welcome, albeit with a few head winds for manufacturers.
“Overall production levels remain healthy, and have been very consistent for the last three months. Employment levels continue to show more people entering the sector, while the largest proportion of comments received are still positive.
“As mentioned last month, the fundamentals of both the PMI and other indicators of the economy still point to positive activity. However, the continued strength of the New Zealand dollar, as well as new order levels continuing to fall, mean there are elements of the sector that need to be watched closely in the months ahead.
BNZ senior economist, Craig Ebert says “Wading through the manufacturing component of the latest QSBO, while there are clear hints of moderation, it seems mainly a settling down into normal growth patterns rather than any sort of stalling. We get a similar impression for the recent PMI levels and trends, with its weak spot seemingly concentrated in new orders.” . . .
Business is never easy but 21 successive months of expansion with the dollar providing a head wind is a sign of the sector’s strength.