Manufacturing activity continued to show decline during May, although the slowdown was not as strong as that recorded in the previous month.
The latest ANZ-Business NZ Performance of Manufacturing Index showed a May value of 49.3, up from 47.9 in April. Scores above 50 indicate that activity is expanding; below 50 indicate a decline.
The 2005 results for both April and May are similar to activity levels during the same time in 2003, although the results for 2005 show a stronger level of decline.
The South Island was the main driver of the overall decline, with the Otago/Southland (46.8) and Canterbury/Westland (48.9) regions both recording significant falls from the previous month. The Northern region (49.4) showed slight decline, while the Central region (50.1) was close to displaying no change in activity.
The new orders (50.7) sub-index was the only one to show expansion during May. Production (49.7) displayed only slight contraction in activity, while the remaining indexes displayed moderate decline.
The May result represented somewhat of a small recovery from April, which many manufacturers considered a difficult month in terms of activity. The high value of the New Zealand dollar continues to cause strong concern for those manufacturers who predominantly export their goods. However, recent softening of the New Zealand dollar may ease concerns as long as further depreciation takes place.
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