Members of the New Zealand Manufacturers and Exporters Association remain concerned about markets and production capacity, especially pressures on company margins due to the currency. These sentiments have seen net confidence decrease among the businesses surveyed in the latest New Zealand Manufacturers and Exporters Association Survey of Business Conditions. In the latest survey, manufacturing export sales decreased by 5.6 percent, although domestic manufacturing sales increased by 15.8 percent in February 2013 compared to February 2012. Overall, total sales increased by 2.5 percent year-on-year.
However, in the other survey we monitor – BNZ-Business NZ Performance of Manufacturing Index – the proportion of positive comments from manufacturers lifted in March 2013 compared to January and February. Further, analysts argue that this positive outlook is being supported by the latest Quarterly Survey of Business Opinion.
The BNZ-Business NZ seasonally adjusted PMI stood at 53.4 in March 2013, which is a slight drop on the PMI readings in February (56.0) and January (55.1). Of the five seasonally-adjusted indicators that make-up the PMI, new orders was the highest sitting at 55.3, followed by production sitting at 53.0, and deliveries sitting at 52.2.
In regards to three-monthly averages, the PMI stood at 52.8 in the three months to March, with production and new orders sitting above 50 during this time, and employment just below at 49.7. If we compare this result with the three months to March 2008, it can be seen how manufacturing activity has contracted and then modestly expanded.
This contraction and expansion is also seen at a regional level, where five years ago manufacturing in the Northern, Central and Otago regions was experiencing a contraction. In March 2008, for example, manufacturing activity in the Central region had a PMI reading of 45.8, while in March 2013 this reading stood at 60.9.
The seasonally adjusted JPMorgan Global Manufacturing PMI was up in March 2013 (51.2) compared to February (50.9), but down on the result seen in January (53.3). The three monthly average for the Global PMI in March 2013 stood at 51.8; with similar averages in output and employment. The Global PMI hovered around the 50.0 mark throughout 2012, and this trend looks likely to continue due to an on-going decline in manufacturing output in the Eurozone and the United Kingdom, and subdued output from Japan.