The manufacturing sector expanded for a third consecutive month in December, according to the BNZ-Business NZ Performance of Manufacturing Index, with all five areas surveyed - production, employment, new orders, finished stocks, and deliveries - expanding for a second straight month.
Read the BNZ-Business NZ statement below:
Manufacturing activity in 2010 ended on a solid note, with its third consecutive month in expansion, according to the BNZ - BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for December stood at 53.1, up slightly from 52.7 in November and 50.4 in October (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).
It was also the first time since the start of 2008 that all five indices - production (52.6), employment (51.1), new orders (54.3) finished stocks (51.6) and deliveries (54.9) – were all in expansion for the second consecutive month.
BusinessNZ’s executive director for manufacturing Catherine Beard said that there is a number of reasons to take heart from the results through the year.
“Over 2010, the sector was in contraction for three months, well below the 2009 figure of eight and 2008 figure of nine. Also, given the last quarter of 2010 was positive throughout, it suggests manufacturing will enter 2011 on a firmer footing than was looking likely at the end of the September quarter.”
“Globally, the JPMorgan Manufacturing PMI, which New Zealand is part of, also finished on a good note for 2010 with the December value the highest for six months. Interestingly, while New Zealand’s position has improved, Australia is still struggling somewhat with its fourth consecutive month in contraction”.
BNZ senior economist Craig Ebert said the latest figures show evidence of a predicted rebound in manufacturing for the closing stages of 2010 and the start of the New Year.
“Despite the depressing slump in last year’s September quarter, we always believed manufacturing would recover. December’s PMI, backed up by the Quarterly Survey of Business Opinion, show that our predictions were on the right track. Both show a lift in new orders and production, with staffing indicators continuing to hold up and little sign of over stocking. This is all confidence-boosting stuff.”
Unadjusted results by region showed three of the four regions in expansion during December, although all showing lower values than November. The Northern region was down 9.6 points (51.9), while the Central region was down 7.5 points (53.1). In the South Island, the Otago/Southland region was down 4.7 points (61.3), while Canterbury/Westland (48.4) fell back to levels similar to October.
17 Comments
I would sack minister Steven Joyce, because of not performing in the interest of the nation.
That’s another reason, why production preferable a strong manufacturing sector is important for a nation. Minister Joyce - it would be far better to cut imports in the billions and start producing quality infrastructure needs right here in NZ – then producing bloody more criminals/ prisons costing ratepayer billions.
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And the British academics say New Zealand has greater inequality than most countries.
...the inequality between high-income earners and low-income earners is resulting in poverty for the latter and major social problems.
Full article: http://www.stuff.co.nz/national/4571384/Wealth-gap-divides-nation
But what about the retail sales figures folks? http://www.interest.co.nz/news/weak-supermarket-and-grocery-store-sales…
A quick explantion for me Ian ( you sceptic, you...). I'm a bit lost on the monthly trend "improvement" quoted in the article!
"Unadjusted results by region showed three of the four regions in expansion during December, although all showing lower values than November. The Northern region was down 9.6 points (51.9), while the Central region was down 7.5 points (53.1). In the South Island, the Otago/Southland region was down 4.7 points (61.3), while Canterbury/Westland (48.4) fell back to levels similar to October."
Yeah – well done GB – make it official – the three pillars of our economy NZTourism vs. NZAgriculture biting each others arses - plus NZReal Estate !
The university of “NZProperty Investors” lectured by the 10 top politicians/ policymakers and chaired by Olly - with 10'000 students mostly from China I'm sure - HA - what an economy ???!!
This is a story by bank economists. Think about why banks employ economists, and it is not to provide the public with indepenent economic advice.
That would suggest you need to look at the 5 page report - preferably ignoring BNZ's positive headings which are not reflective of of the rest of the content - before concluding anything.
The BNZ compares QSBO finished goods (net % reporting stocks too high - about 17%) with PMI finished stocks (diffusion index, seasonally adjusted) to conclude that there is little sign inventories have blown out, and to support a heading of "Agreement on Manufacturing Mending".
Another quote from the BNZ PMI report:
"The comments about market conditions showed the proportion of positive comments (54.5%) continuing to improve from the previous month. Positive comments focused on a pick-up in offshore orders, along with the typical Christmas rush. Negative comments were again short and sharp, focusing on the general economic climate, including a lack of activity in other sectors hampering further orders coming through."
A look at the BNZ - BusinessNZ Performance of Manufacturing Index Time Series (Aug 2002 - Dec 2010) - top of page 2 of the report - suggests any recovery is anemic and perhaps the result of "the typical Christmas rush".
At this point I wouldn't conclude from this survey more than the QSBO report suggests - it could have been worse.
"If you want an absolute sign that a country is in trouble, it is when politicians, economists, business, (and) banking agree that rising house prices are a good thing. It is the absolute death knell for an economy when shelter becomes expensive."
A sobering post from a blogger to Steve Keens site.
http://www.debtdeflation.com/blogs/2011/01/21/how-i-learnt-to-stop-worrying-and-love-the-bank/
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