The New Zealand manufacturing sector continued to expand in July, though at a slower pace than in the previous month, according to a key index.
The BNZ - BusinessNZ Performance of Manufacturing Index (PMI) was released yesterday. The seasonally adjusted PMI for July was 53.0. This was 0.4 points lower than June, although it represents 22 consecutive months or expansion.
PMI readings above 50 indicates that manufacturing is expanding, while results below 50 indicate contraction.
BusinessNZ’s executive director for manufacturing Catherine Beard said in a statement that results over the last four months show that the PMI has reached a level of expansion that is consistent with moderate growth.
"Since the survey began in 2002, the long term average level of activity for the PMI has been 52.7, with results over the last four months sitting at or above that. While we have experienced 15 months of strong expansion prior to April, recent results show that the sector is still clearly in positive territory,” she said.
BNZ senior economist, Doug Steel said, "Recent surveys point to a manufacturing sector in good spirits. While manufacturers are not quite as confident as they were earlier in the year, optimism remains above average levels."
All five seasonally adjusted main diffusion indices were in expansion during July. New orders (55.0) led the way for the first time since March, with an increase from 52.2 in June. In contrast, production (54.0) dipped 1.9 points from the previous month to its lowest point since March 2013.
Employment (51.3) also dipped, dropping 1.4 points from June, while finished stocks (51.5) returned to positive territory. Deliveries (53.3) dropped 1.9 points after a strong pick up the previous month.