Manufacturing sector leaps back to life

The manufacturing sector has roared back to life, with new orders and production levels leaping into growth mode.

Stock image of boxes with Made in New Zealand stamped on the side.

Photo: 123rf

The BNZ-Business New Zealand Performance of Manufacturing Index (PMI) for January rose 9.2 points to 57.5.

The reading above 50 points – which indicates growth – is a far cry from its December reading when it slumped 6 points into contraction territory and the strongest monthly read since July last year.

BNZ senior economist Craig Ebert said indications from firms was that “bigger was better”.

“By firm size, there was a very clear message of the bigger the better – traversing an unadjusted 49.4 for micro firms to 65.3 for large firms.”

Components within the measure also told a positive story, with new orders jumping to a very strong 62.4, after nearly stalling in December.

Production lifted to 59.1, and the employment index was also positive coming in at 55.4.

By industry, non-metallic minerals was doing best at 70 points and wood and paper next best on 62.9.

Printing, publishing and recorded media, as well as machinery and equipment manufacturing were in contraction however, each on 48.1.

Despite the pandemic and various lockdowns persisting in other parts of the world, the global PMI indicated the sector remained strong at 53.5.

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