The rate of manufacturing growth appears to be easing, with the Business New Zealand PMI recording a figure of 53.8 in January.  This easing in expansion can be seen in the seasonally adjusted figures.  While the seasonally adjusted PMI for January recorded 53.3, where a PMI reading above 50.0 indicates that manufacturing is generally expanding, this was below the December 2007 seasonally adjusted PMI reading of 53.8

Examining the sub-indexes, production and employment were down in January compared to December 2007.  Production dropped three index points to 51.5 in January 2008, the lowest result for this sub-index in eight months.  Employment dropped 0.4 index points between December and January to 51.2.  While this is 1.4 points below the result recorded in January 2007, it is well above the 46.1 seen in January 2006.

New orders continued to expand slightly, up 1.1 points from the previous month.  However, new orders were particularly volatile throughout 2007, and it will be an interesting sub-index to watch in 2008.  Comparing year-on-year results, new orders were down 3.8 index points from 57.9 in January 2007 to 54.1 in January 2008.  Finished stocks were also up 1.1 points this month, while deliveries were up 2.0 points to 55.7.

Interestingly though, all these sub-indices remain above the benchmark 50 level, indicating manufacturing continues to expand.