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New Zealand's Manufacturing Sector Contracts in May, Says BusinessNZ

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Manufacturing in New Zealand edged lower in May as the sector struggled with weakening customer demand, higher fuel prices and global uncertainty from the Middle East conflict, BuisnessNZ said Friday.

According to the BusinessNZ Performance of Manufacturing Index (PMI), the seasonally adjusted PMI scored 49.9 last month, tracking a slight contraction, down from 50.4 in April and 52.8 in March.

"We believe the sector is likely to go through a flat patch during winter but, Middle East willing, we still think the broader economy can pick up some momentum at the tail end of this year so there is no reason to believe manufacturing will be an exception," said Stephen Toplis, BNZ Head of Research.

PMI sub-indexes indicated mixed business activity, with production, employment and new orders largely flat while finished goods stocks and deliveries showed improvement.

The firm also noted that small firms were the most impacted, recording a sub-index reading of 46.0, in contrast to large firms, which performed strongly at a reading of 57.6.

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