Manufacturing activity fell during April, reaching its lowest level since PMI surveys began in August 2002.
The latest ANZ-Business NZ Performance of Manufacturing Index showed an April value of 47.9, down from 51.5 in March. Scores above 50 indicate that activity is expanding; below 50 indicate a decline.
Manufacturing has gone into ‘decline’ territory only twice since the survey began; one of those times was April 2003.
The North Island was the main driver of the overall decline, with the Northern (46.6) and Central (45.4) regions both recording significant falls from the previous month. The South Island regions - Canterbury/Westland (53.2) and Otago/Southland (51.3) - had modest expansion.
The new orders (47.9) sub-index fell to its lowest ever value, and indicated contraction for the first time. Employment (50.7) was the only sub-index not showing a decline in April, while production (46.1), deliveries (47.2) and finished stocks (48.1) all recorded their lowest ever values.
Although April tends to show lower levels of activity, the fall for 2005 contrasts with continued expansion during the same time in 2004.
Manufacturers concerns include the high dollar, falling export and domestic orders, and the difficulty of finding staff in a tight labour market.
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