Vital Statistics
03 Oct 2007
Manufacturing index higher in August '07
Fiona Stokes
The Business NZ Performance of Manufacturing Index (PMI) was up 0.9 points from July, to 55.7 in August. The August 2007 PMI was the same as the May figure, but 0.1 below the highest figure recorded for the year of 55.8 in January. In comparison with previous August months, the August 2007 result is mid range with only 2002 (57.1) and 2004 (57.4) showing stronger results. Unadjusted manufacturing activity in August showed all regions in expansion. Canterbury/Westland region (59.3) sits at number one with the Northern, Central, and Otago/Southland regions showing similar levels of activity, 56.8, 58.1 and 56.9 respectively. PMI figures for production, employment, new orders, finished stocks, and deliveries were up from last month. Production had the largest increase from 55.2 in July to 58.9 in August. However, employment (50.3) showed no significant change. Happy birthday to the PMI, five years old and able to illustrate manufacturing has generally expanded during this period. In addition, the average PMI over the last five years has been 54.5, which is also the same as the average score for this year.
We are forecasting the September 2007 PMI to remain in the 54 to 55 range, as the exchange rate drops and employment remains stable. One quarter to one third of the respondents to the Business New Zealand PMI indicate that the exchange rate and skill shortages impact on their businesses. A PMI reading above 50.0 indicates that manufacturing is generally expanding, while a reading below 50.0 indicates manufacturing is declining.
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