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The manufacturing sector in New Zealand fell deeply back into contraction in August, the latest survey from BusinessNZ revealed on Friday with a manufacturing PMI score of 40.1.

That’s down sharply from 62.2 in July, and it moves well beneath the boom-or-bust line of 50 that separates expansion from contraction.

A renewed nationwide lockdown in response to Covid-19 is the culprit.

Individually, production, deliveries, finished stocks and new orders all contracted, while employment somehow continued to expand.

“Employment (54.5) managed to keep its head above water, but all other sub-index values were in contraction with Production (27.7) the hardest hit,” BusinessNZ’s executive director for manufacturing Catherine Beard said.

“Although manufacturers outside of Auckland have returned to alert levels that allow business operations to restart, any moves towards the sector getting back into expansion will ultimately depend on how soon Auckland can also return to lower alert levels.”


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