New Zealand’s manufacturing sector saw a reduction in the level of expansion for the first month of 2022, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for January was 52.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.7 points lower than December, and below the long-term average of 53.1 for the survey.
BusinessNZ’s Director, Advocacy Catherine Beard said that despite the PMI being in expansion since September, it has struggled to gain any real expansionary momentum. The constantly changing COVID-19 related rules and sanctions are obviously a key inhibiter for certainty and planning, which will likely continue for some time yet given the expected wide spread of Omicron in New Zealand.
“In terms of the main sub-indices, Production (51.2) and New Orders (53.3) both fell back from healthy levels of expansion in December, while Employment (49.2) fell back into contraction. These lower activity levels also saw the proportion of negative comments increasing from 49.5% in December to 63.1% in January.”
BNZ Senior Economist, Doug Steel stated that, “January’s PMI results feel like something of a placeholder before Omicron hits proper over coming months along with anticipated higher rates of absenteeism and disruption.”
