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NZ manufacturing slows, but still strong in June

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New Zealand manufacturing activity continued to grow in June, though at a somewhat slower pace than in May.

Stuff.co.nz reports that the BNZ-BusinessNZ PMI reading for the month was 54.7. This represented a fall of 4.3 points from May.

A score over 50 means that the sector is expanding, while a score under 50 means that activity is contracting.

This result follows the release of the New Zealand Institute of Economic Research’s quarterly survey of business opinion earlier this week. This survey showed that manufacturers were much more upbeat about the state of the economy, and were expecting higher outputs, exports, and profitability in the coming quarter.

"While another result like that of May would have been warmly welcomed, the June result still had enough punch to indicate the sector is certainly in better shape than it has been for some time," said Catherine Beard, executive director for manufacturing at BusinessNZ.

"New orders and production continue to hold up, which is a key element for overall growth in the sector. Also, employment has now been in positive territory for 3 of the last 4 months, while comments from exporting manufacturers report continued steady demand for their products."   

All five sub-indices expanded in June. Production recorded 55.5 and new orders came in at 55.1.

Food, beverages and tobacco manufacturing decreased to 52.8 from 61.4 in May. Petroleum, coal, chemical and associated product manufacturing decreased to 52.1 from 62.1 in May. And textile, clothing, footwear and leather manufacturing recorded 50.9.

In terms of regional results, Northern fell to 56 from 60.5 in the previous month, Canterbury dropped to 53.3 from 67, and Otago/Southland declined to 53.2 from 60.7 in May. Central region also decreased to 49.5, compared to 55.4 in May.

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