13 Mar 2020

Manufacturing sector expands in February

2:37 pm on 13 March 2020

The manufacturing sector looks to be defying the economic slowdown odds, up 3.4 points on last month, but economists say the next few months will be telling.

Stock image of boxes with Made in New Zealand stamped on the side.

Photo: 123rf

The BNZ-Business New Zealand Performance of Manufacturing Index for February was 53.2.

A reading above 50 points indicates expansion.

BNZ senior economist Craig Ebert said it might be the calm before the storm, but the fact it had gone up was interesting.

"I guess a lot of people might have been expecting it to fall into clear contraction territory and basically it didn't do that.

"The big issue is where that index is going to be over the coming months and what it will represent and of course we're conscious of downside but for the moment it's holding up."

Production, employment and deliveries of raw materials data was also all above 50.

Ebert said globally, New Zealand's results held up well.

"China really woke a lot of people up when its PMI proved to be far worse than what was expected. Everyone expected it to fall, but not nearly as far as it did."

China's PMI for February was 35.7 down from 50 in January.

"On the other hand the PMI indices in Europe and America weren't showing any real degree of contraction through the course of February, which again highlights that this is a moving feast.

"I think we can all agree that a slowdown is upon us we're just not sure of the extent and the duration of it."

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