This is the highest level of manufacturing activity since May 2006, and can be attributed to positive results in all five of the seasonally adjusted indices, strong growth across the various manufacturing industries, and strong business activity in those manufacturing firms surveyed. This growth has also resulted in more positive comments from manufacturers. 

In the five seasonally adjusted indices, employment had a star performance in October. Usually the worse performer, employment rose from 51.0 points in October 2006 to 53.8 points in October 2007. The only time employment has been this high since the PMI began, was in October 2002, where it sat at 54.1 points. 

Sitting at 59.7 points, deliveries was the best performing seasonally adjusted indices, followed by new orders at 58.0 points and production at 57.6 points. Deliveries rose 2.5 points from September to October, while new orders rose only 0.4 points and production rose 2.3 points.

The petroleum, coal, chemical and associated product sector along with wood and paper products and the food, beverage and tobacco manufacturing sectors continued to exhibit strong growth in October. This growth is reflected in business activity, particularly among medium-to large sized firms who provided the strongest result in business activity in November. 

Although the proportion of negative to positive comments for October remains 53.1 percent negative and 46.9 percent positive, there has been a move closer towards the positive. Negative comments from those manufacturing firms surveyed by Business New Zealand continue to focus on the NZ dollar, competition from cheap imports, and labour shortages. However, the Christmas season may bring some joy as many manufacturing firms move into their busiest time of the year. 

This joy should be reflected in the November 2007 PMI, which we are forecasting will be as positive as the results seen in November 2002 and 2004, of 57.4 points and 58.3 points respectively, as opposed to that seen in November 2005 at 44.7 points.