NZ manufacturing growth slows as hiring dips, Canterbury in weak spot
New Zealand manufacturing growth slowed for a second month in September as hiring contracted and manufacturing shrank in Canterbury/Westland, suggesting activity is cooling in a regional economy being fuelled by the post-quake rebuild.
The BNZ-BusinessNZ PMI fell 2.8 points to 54.3 in September from August, which was still the highest reading for that month since 2007.
The PMI follows the release this week of the Quarterly Survey of Business Opinion, which showed firms in Canterbury experiencing growth fell to a net 21 percent in the third quarter from 25 percent three months earlier. Manufacturing in Canterbury/Westland fell to 42.5 in the September PMI from 56.7, below the 50 level that separates expansion from contraction, and the lowest September reading in at least six years.
Three of the five seasonally adjusted diffusion indexes in the PMI remained in expansion in the latest month. New orders eased to 58.8 from 60.9 in August. Production fell to 55.5 from 58.3 and deliveries of raw materials eased to 54.8 from 55.9.
Finished stocks eased back to 50 from 54.1 and employment dropped to 48.6, the first decline in a sub-index since April, from 54.1.
"The disappointment is simply that manufacturing growth looks decent, rather than very strong," said Craig Ebert, senior economist at Bank of New Zealand. The PMI is still above the average since August 2002 of 52.5, "so we're still talking better than average expansion, just not as hefty as seemed the case a short while ago."
The weak outcome for Canterbury didn't show up any common complaint among respondents, he said.
Among other regions, the North Island's central region was strongest on 58.5, the Northern region was on 54.1 and Otago/Southland fell back to 50.7.