Manufacturing outlook takes a dip
The mood among the country's manufacturers has taken a dive.
The mood among the country’s manufacturers has taken a dive.
The latest monthly Performance of Manufacturing Index, run by Business New Zealand and the Bank of New Zealand, shows the outlook turning negative.
The index is at 48.0 for April – and anything below 50 is a signal of the sector is shrinking. It is down 5.8 points from March.
Production and new orders have dipped across the sector, the only positive area of activity being a small rise in employment.
The only expandion was in food, beverage and tobacco, at 54 on the index, although this has taken a large drop from the previous month’s 63.1.
The survey, which is lined up with PMI surveys around the world, is particularly volatile at the moment, Bank of New Zealand economist Doug Steel said.
“It’s been on a rollercoaster over the past few months. From a low of 45.8 in November last year, it then roared higher to a peak of 57.8 in February, only to sharply unwind to 48.0 by April.”
“It highlights the more than usual month-to-month volatility in performance. Planning can only be more difficult with such choppiness.”
The trend has been positive, he says, but only mildly, with the three-month average at 53.2 on the index.
The high in February was seen as being a little too optimistic, he says, and for the same reason he believes the latest figure is probably too pessimistic.
“Manufacturers seemed confident enough to make net additions to the payroll in April, despite a dip in production and new orders."
This follows last week’s Household Labour Force Survey that showed manufacturing employment grew 2%, or 5000 people, in the year to March 2012.
“Not strong growth for sure, and it is still coming off a low base, but supporting evidence of some underlying improvement.”
Rob Hosking
Thu, 10 May 2012
Thu, 10 May 2012
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Manufacturing outlook takes a dip
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