Manufacturing activity declines

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For the first time since the survey began in August 2002, the ANZ-Business NZ PMI recorded an index value below 50 in April, pointing to a contraction in manufacturing activity.

The April PMI was 49.3, down from 52.7 in March (a PMI reading above 50 points indicates manufacturing is generally expanding; below 50 indicates it is contracting).

There were some encouraging signs with the forward looking new orders sub-index recording moderate expansion (50.6), bolstered by the strength of new orders in the food, beverage & tobacco sector and the machinery & equipment sector.  Nevertheless, other sub-indexes showed contraction, notably the production sub-index (48.0). 

Manufacturers surveyed for the April PMI attributed the overall decline to international uncertainty, the continued high exchange rate - particularly against the US dollar - and current and upcoming legislation affecting employers.   

New Zealand’s PMI performance in April – slipping from expansion to contraction – was in contrast to Australia’s PMI for April, which showed continued expansion.  The US PMI continued to record a decline.

Full results are available on www.anz.co.nz under ‘ANZ Spotlight/Economics’ and on www.businessnz.org.nz under ‘PMI Reports’.  For more information or assistance with data interpretation, contact Stephen Summers, ph 04 4966564, ssummers@businessnz.org.nz. 

The ANZ-Business NZ PMI (performance of manufacturing index) is sponsored by business banking specialist ANZ Banking Group (NZ) Ltd and draws on the depth of member companies associated with Business NZ: EMA (Northern), EMA (Central), Canterbury Employers’ Chamber of Commerce, Canterbury Manufacturers’ Association and Otago Southland Employers’ Association.  

For media comment:
Simon Carlaw Chief Executive Business NZ ph 04 4966555, scarlaw@businessnz.org.nz
David Drage Chief Economist ANZ ph 04 4968795, draged@anz.com