Source: Radio New Zealand
Manufacturing activity in February continued expanding at the same pace as in January. 123RF
- Manufacturing activity eases slightly by 0.1 points to 55.0 – above 50 is expansion
- Activity remains near four-year highs
- All five sub-indexes are in expansion – deliveries and employment slow
- Middle East chaos clouds outlooks – increases inflation risks
Manufacturing activity in February continued expanding at the same pace as in January, reinforcing expectations that the economic recovery is continuing.
The BNZ-BusinessNZ Performance of Manufacturing Index (PMI) eased by just 0.1 points to 55.0 – just below January’s 55.1 reading.
Manufacturing activity remains near four-year highs, and comfortably above the long‑term survey average of 52.5.
A reading above 50 indicated the sector was expanding.
BusinessNZ’s Director of Advocacy, Catherine Beard, said the February result marked the first time since mid-2021 that activity had recorded three consecutive months at 55.0 or higher.
“All five sub-index values were again in expansion during February, led by the two key indices of New Orders (57.6) and Production (56.7), followed by Deliveries (51.0),” Beard said.
“Employment (50.4) dipped from January, but still remained in slight expansion,” Beard said.
The proportion of positive comments from respondents stood at 55.5 percent in February, up from 47.7 percent in January, but down from 57.1% in December.
Manufacturers reported more orders, enquiries, and sales, supported by stronger export demand and improving conditions in certain sectors, with some reporting a growing pipeline of work and a gradual improvement in business confidence.
BNZ’s senior economist Doug Steel cautioned that February’s data did not capture the impact of the conflict in the Middle East and said recent data had taken a backseat to the recent chaos there.
Steel said the conflict’s timing was poor, with the economy just beginning a fragile recovery and inflation still above three percent, posing risks to both.
Additionally, a significant proportion of manufacturing output was exported overseas and the conflict’s impact on our trading partners would also have to be watched closely.
Despite external events, Steel was still upbeat, noting “the February out-turn well above the breakeven 50 mark is a useful starting point”.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
