New Zealand's manufacturing sector showed continued expansion in August, but at a slower pace than seen in July, as cost-of-living pressures and the Middle East conflict continued to weigh on sentiment.
The seasonally adjusted BusinessNZ Performance of Manufacturing Index for August was 53.1, down from 54.3 in July but still hovering above the 50 mark that separates expansion and contraction, and higher than the survey's long-term average of 52.5.
BusinessNZ Director of Advocacy, Catherine Beard, said that the survey is closely watching the employment subindex that's sitting right on the breakeven mark, also the weakest among all sub-indexes.
Deliveries were the second lowest subindex at 52.6, down from July's 55.5, while finished stocks rose the highest at 56.4 from 53.4, followed by new orders, which rose to 54.9 from 53.6. Production fell to 54.2 from 57.1.
Sentiment softened further in August with 55.7% of comments negative, though a "good number" of respondents said steady or improving order books was a positive note, as new orders and finished stocks were the only two sub-indexes that showed monthly growth.
All sub-industries except "other" expanded in August, with food and beverage, textiles and non-metal manufacturing moving from contraction to expansion, while the decline in the overall PMI reflected softer readings in previously stronger industries rather than a broad-based weakening, BusinessNZ said.
BusinessNZ added that the survey data shows positive economic momentum in the third quarter and supports its forecast of 2% gross domestic product growth in the second half of the year.
