New Zealand's manufacturing sector recorded a sharp expansion in June, reaching its highest reading since July 2021, as full order books and strong sales outweighed the Middle East conflict and cost-of-living pressures.
The latest BusinessNZ Performance of Manufacturing Index for June was 59.7, up significantly from 51.3 in May and the survey's long-term average of 52.5.
Under the survey, a reading above 50 indicates an expansion, while a reading below 50 shows a contraction.
"There are still real headwinds with the conflict in the Middle East and high fuel prices continuing to be a factor for many respondents, but this month's result reflects a huge positive shift after a long stretch of soft results, which is a very welcome turn," said BusinessNZ's Director of Advocacy, Catherine Beard.
All subindexes of the survey showed expansion, especially new orders, which rose to 64.1 from 53.2 in May, while production rose to 59.4 from 50.6, and deliveries reached 57.3 from 52.9.
New Zealand ranked at the top of J.P. Morgan Global Manufacturing PMI, followed by Japan at 54.8 and the US at 53.9.
Bank of New Zealand said that further expansion is needed in July to be convinced of its accuracy, but the lift provides some justification for the Reserve Bank of New Zealand's decision to begin moving the cash rate toward the neutral target.
