Key facts
- New Zealand's manufacturing sector expanded in July.
- The seasonally adjusted Performance of Manufacturing Index (PMI) fell to 54.3 in July from a revised 60.1 in June.
- A PMI reading above 50 indicates expansion in manufacturing activity.
- Businesses reported increased costs due to Middle East conflict and cautious consumer spending.
- The BusinessNZ PMI, according to a separate report, rose to 52.8 in July from 48.8 in June, returning to expansion territory.
- Key sub-indices like New Orders and Production showed significant growth in the latter report.
New Zealand's manufacturing sector continued its expansion in July, albeit at a slower pace than the previous month, according to data from the Bank of New Zealand-BusinessNZ. The seasonally adjusted Performance of Manufacturing Index (PMI) fell to 54.3 in July, down from a revised 60.1 in June, which had been the highest level since July 2021.
A reading above 50 indicates growth in manufacturing activity. Despite the slowdown, the index remained in expansionary territory. However, sentiment among businesses weakened, with 57% of comments being negative, according to Catherine Beard, BusinessNZ's director of advocacy. Concerns cited include rising costs, potentially exacerbated by Middle East conflict, and cautious consumer spending.
An alternative report from Trading Economics indicated a slightly different trend, stating the BusinessNZ PMI rose to 52.8 in July from 48.8 in June, returning to expansion after two months of contraction. This report highlighted growth in sub-indices such as New Orders and Production, reaching their highest levels since 2022. Employment also expanded slightly. However, this report also noted that 58.6% of respondents reported negative conditions, citing weak demand, rising costs, and economic uncertainty.