New Zealand’s manufacturing sector saw a strong boost in new orders and production during March, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for March was 63.6 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was up 9.4 points from February, and the highest monthly result since the survey began in 2002.
BusinessNZ’s executive director for manufacturing Catherine Beard said that the March result was obviously a shot in the arm for the sector, although any single monthly movement needs to be treated with caution in the context of the current economic environment.
“The two major sub-index values of Production (66.8) and New Orders (72.5) were the main drivers of the March result, with the latter experiencing its first post 70-point value. This does indicate a swift shift in demand over a relatively short time, which may indicate a move towards previously shelved projects and business ventures that have now been given the green light”.
“Given the strong March result, the proportion of those outlining positive comments increased significantly from 46% in February to almost 58% in March. Unsurprisingly, comments were centred towards increased demand, both domestically and offshore”.
BNZ Senior Economist, Doug Steel noted that “more demand is one thing, but meeting it is another. Firms have faced many supply-side challenges. In this regard, it is interesting to see PMI deliveries of raw materials lifted strongly, to 62.8, this month. That coincides with other data showing imports leapt more than 17% above year earlier levels in March following prior weakness”.
