New Zealand's Business NZ PMI still in contraction territory, but improves to 48.9 in April

BusinessNZ's New Zealand Performance of Manufacturing Index (PMI) saw an uptick in April, with the seasonally-adjusted figure coming in at 48.9 compared to March's 46.8, but is still lower than February's 49.1.

New Zealand's manufacturing sector has been in contraction for 14 consecutive months, though the figures are seeing signs of improvement rather than across-the-board weakness. 

As noted by BusinessNZ's Director of Advocacy Catherine Beard, "The key sub-index result of Production (50.8) returned to expansion for the first time since January 2023, as well as Employment (50.8) and Finished Stocks (50.4) also both returning to slight expansion. In contrast, New Orders (45.3) remained firmly in contraction, although showing a slight improvement from March." BusinessNZ Director, Advocacy Catherine Beard continued, "despite the small improvement in April, the proportion of negative comments again increased to 69%, compared with 65% in March and 62% in February. An overall lack of sales and orders was the dominant theme in comments, along with a struggling economy".

Market impact

NZD/USD is trading thinly into the high side in the early Friday market session, drifting into 0.6040 after finding an intraday floor near 0.5980.

About BusinessNZ's PMI

The Business NZ Performance of Manufacturing Index (PMI), released by Business NZ on a monthly basis, is a leading indicator gauging business activity in New Zealand’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production or employment.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the New Zealand Dollar (NZD). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for NZD.