New Zealand's Business NZ PMI improves to 46.7 versus October's 42.5

New Zealand's Business NZ Performance of Manufacturing Index (PMI) recovered some ground in November, printing at 46.7 compared to October's 42.5.

Key Highlights

Business NZ's November PMI recovered to 46.7, the indicator's highest reading since June. October's print of 42.5 was the lowest print for the NZ PMI since September's third quarter.

Despite NZ's PMI remaining in contraction territory below 50.0, Business NZ's Advocacy Director Catherine Beard noted that while “the key sub-index measure of Production (43.6) remains stubbornly low, New Orders (47.7) showed some improvement compared to previous months. Employment (47.9) also showed a relative improvement."

According to Business NZ Senior Economist Craig Ebert, "at the heart of the recent poor run in the PMI has been its production index. While this improved a bit in November, it was, at 43.6, almost 10 index points south of its long-term average. That’s a big undershoot, in historical context".

Market Reaction

The Kiwi is seeing strictly muted reactions to data in the early Friday Asia market session, trading just north of the 0.6200 handle.

About the Business NZ Performance of Manufacturing Index (PMI)

The Business NZ Performance of Manufacturing Index (PMI), released by Business NZ on a monthly basis, is a leading indicator gauging business activity in New Zealand’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production or employment.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the New Zealand Dollar (NZD). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for NZD.