New Zealand’s March manufacturing activity continues to expand but at the slowest pace since July last year as production and new orders eased.
The Bank of New Zealand-Business NZ performance of manufacturing index eased 1.5 points to a seasonally adjusted 51.9 in March , and was down from a 53.7 reading in the same month a year earlier. A reading above 50 indicates activity is expanding.
BusinessNZ’s executive director for manufacturing Catherine Beard said that the slow level of expansion for March meant the first quarter of 2019 averaged out at 52.7, which was below the long run average of 53.4 for the survey.
The production sub-index fell 2.2 points to 51.4 while the new orders were down 1.9 points at 52.5. Finished stocks fell 1.9 points to 53.1 while deliveries were down 2.6 points to 52.3. The only sub-index to show a lift was employment, up 1.1 points to 51.9.
BNZ senior economist Craig Ebert, however, was relatively upbeat about the data.
“Slow as it might appear, New Zealand’s PMI of 51.9 in March was certainly doing well in a global context. Of all the deceleration that has occurred in the world economy over the last 6-12 months, manufacturing has been at the forefront,” he said.
The global slowdown “has been tied to a rocky patch in cross-border trade and a reservation regarding investment – all aggravated by unresolved ‘trade tensions’ and uncertainties between major countries and blocs,” said Ebert.
He noted the message that the manufacturing industry is “toughing it out” is consistent with the latest quarterly survey of business opinion from the New Zealand Institute for Economic Research.
“Sure, it found manufacturers decidedly downbeat about the general economic outlook. However, when it came to own activity, the QSBO showed manufacturing more mixed than it was negative,” he said.