The BNZ-BusinessNZ Performance of Manufacturing index returned to positive territory in July, with a reading of 52.8.
The index had been below the "expansion" reading of above 50.0 for May and June. A PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining.
BNZ senior economist Doug Steel noted recently-arisen headwinds from tariffs and gas prices, and said the improvement "will need to be sustained or nudge a bit higher to be consistent with our economic forecasts, but it is good to see a move for the better."
Commercial gas prices have risen 20.7% over the last 12 months.
BusinessNZ director of advocacy Catherine Beard said the index was above the average of 52.5 since the survey began in September 2023.
All five main subindices moved into positive territory.
New orders were at 54.2 (June, 51.8), Production 53.6 (49.6), Finished Stocks 51.8 (46.9), Deliveries of Raw Materials 51.9 (47.9), and Employment 50.1 (48.0).
Negative comments from survey respondents, while at a lower level than in May and June, were still predominant, at 58.6%.
Manufacturers reported weak demand, falling orders, rising costs, inflation, and ongoing economic uncertainty, worsened by tariffs, slow construction, and low consumer spending.
Many cited a lack of confidence, delayed projects, and customers ordering only what is immediately needed, creating stagnant market conditions.
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