The seasonally adjusted PMI for December was 51.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 6.5 points down from the previous month, and the lowest result since December 2012. Despite the drop from November, the sector has remained in expansion in all months since October 2012.
BusinessNZ's executive director for manufacturing Catherine Beard said that while it was disappointing to see the last month of 2017 showing a sizeable dip in expansion levels, the wider context of the results needs to be taken into account.
"While all sub-indexes dropped in December, they all still remain in expansion. Also, the proportion of positive comments in December (63.3%) was very close to the November result (65.1%). Christmas and the general holiday season were mentioned for those who provided both positive and negative comments, along with weather conditions. Overall, we'll be looking to the January result to see if the sector gets back into the level of expansion its been accustomed to in recent times.
BNZ Head of Research, Stephen Toplis, said that "anecdotal evidence, across the economy, suggests there was a post-election hiccup in activity as businesses put off major spending, investment and hiring decisions until there was greater clarity and, more importantly, understanding of likely policy shifts. Today’s data are consistent with this hypothesis".
Source: BusinessNZ || January 19, 2018 |||