- Business NZ
New Zealand's manufacturing sector expanded at the strongest pace since January last month. The Business NZ-BNZ Performance of Manufacturing Index surged to 56.5 in April from 54.7 a month earlier, where a reading above 50 signals expansion in factory activity, while a reading below 50 indicates a contraction. All sub-indices improved, while the strongest gains were recorded for production and deliveries. Production surged from 55.2 in March to 57.9 in the reported month, while new orders increased 58.1 to 60.0. Deliveries also advanced in April, soaring 51.9 to 56.8. Nevertheless, employment continued to fall in April but at a lesser rate than the previous month, falling from 48.6 to 49.5. Also, finished stocks expanded at a slower rate, with the sub-index sliding from 55.3 to 53.7.
The robust PMI reading suggests firms are managing to cope with the stark headwinds that currently face the New Zealand economy, including the continuous slump in dairy prices and the recent strength of the New Zealand Dollar. Dairy prices remain more than 55% lower compared with an early 2014 peak, meaning farmers will face their third-successive season of negative cash flows.
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