Manufacturing expansion continues for July

Media release

Manufacturing expansion continues for July

New Zealand manufacturing continued to record expansion in July, according to the latest ANZ-Business NZ Performance of Manufacturing Index (PMI).

Although New Zealand's PMI value decreased from 62.2 in June to 57.5 in July, this remains 5.9 points higher than July 2003 and an indication of further expansion (a PMI reading above 50 points indicates expansion and below 50 indicates decline).

All five sub-indexes recorded expansion in July, again led by new orders, which was the only index to record a value over 60 (61.6). This was followed by the production, deliveries and finished stocks indexes, with the latter recording the same level of expansion as June.

Three of the four regions recorded expansion for July, with the Canterbury/Westland region indicating the strongest level, closely followed by the Northern region. The Central region recorded a moderate level of expansion, while the Otago/Southland region experienced a decline.

The metal product sector recorded the highest overall level of expansion for July, noting a particularly strong pick up in new orders from overseas. Seasonal patterns had resulted in the textiles, clothing, footwear & leather sector recording an overall decline for July, while the machinery & equipment sector commented on the stable flow of new orders, both from domestic and overseas customers.

Although seasonal activity had caused a fall in expansion for some firms, most were still fairing better than at the same time last year. Some firms reached production capacity in July, while others had been planning ahead for the timing of new contracts to avoid any over-commitment. Generally, labour shortages and exchange rates played a minor role in influences affecting activity for July.

Full results are available on http://www.anz.co.nz under 'ANZ Spotlight/Economics' and on http://www.businessnz.org.nz under 'PMI Reports'.

The ANZ-Business NZ PMI (performance of manufacturing index) is sponsored by business banking specialist ANZ National Bank Ltd and draws on the depth of member companies associated with Business NZ: EMA (Northern), EMA (Central), Canterbury Employers' Chamber of Commerce and Otago Southland Employers' Association.

ENDS

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