Manufacturing activity in 2010 ended on a solid note, with its third consecutive month in expansion, according to the BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for December stood at 53.1, up slightly from 52.7 in November and 50.4 in October (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). It was also the first time since the start of 2008 that all five indices – production (52.6), employment (51.1), new orders (54.3) finished stocks (51.6) and deliveries (54.9) – were all in expansion for the second consecutive month.
BusinessNZ’s executive director for manufacturing Catherine Beard said that there is a number of reasons to take heart from the results through the year.
“Over 2010, the sector was in contraction for three months, well below the 2009 figure of eight and 2008 figure of nine. Also, given the last quarter of 2010 was positive throughout, it suggests manufacturing will enter 2011 on a firmer footing than was looking likely at the end of the September quarter.”
“Globally, the JPMorgan Manufacturing PMI, which New Zealand is part of, also finished on a good note for 2010 with the December value the highest for six months. Interestingly, while New Zealand’s position has improved, Australia is still struggling somewhat with its fourth consecutive month in contraction”.
BNZ senior economist Craig Ebert said the latest figures show evidence of a predicted rebound in manufacturing for the closing stages of 2010 and the start of the New Year.
“Despite the depressing slump in last year’s September quarter, we always believed manufacturing would recover. December’s PMI, backed up by the Quarterly Survey of Business Opinion, show that our predictions were on the right track. Both show a lift in new orders and production, with staffing indicators continuing to hold up and little sign of over stocking. This is all confidence-boosting stuff.”
Unadjusted results by region showed three of the four regions in expansion during December, although all showing lower values than November. The Northern region was down 9.6 points (51.9), while the Central region was down 7.5 points (53.1). In the South Island, the Otago/Southland region was down 4.7 points (61.3), while Canterbury/Westland (48.4) fell back to levels similar to October.
Click here to view the December PMI
Click here to view the PMI time series data
For media comment:
Catherine Beard 04 496 6560 or 027 463 3212
Craig Ebert 04 474 6799
