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Manufacturing slips back below 50 as demand stays soft
NZ manufacturing PMI fell to 49.9 in May, slipping back below the 50 mark. Weakening demand and higher energy costs drove the decline, while a split between small and large firms widened.
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New Zealand’s factory sector edged back into contraction in May. The BNZ-BusinessNZ Performance of Manufacturing Index fell from 50.4 to 49.9, slipping below the 50 threshold that separates growth from contraction. The index peaked at 52.8 in March before fading.
“Disappointing to see the PMI slip back into negative territory,” BusinessNZ Director of Advocacy Catherine Beard said. She pointed to weak customer demand, higher fuel costs, and the conflict in the Middle East as the main drags.
The sub-index breakdown was mixed. Deliveries (51.9) and finished goods inventories (53.8) held in expansion. Production, employment, and new orders all clustered near 50 – expansion in name but flat in practice. That lack of forward momentum is the real story, not the single-point dip.
A growing divergence by firm size showed up in the data. Micro-firms with fewer than 10 employees recorded a deep 46.0 reading. Large companies with more than 100 workers reported a strong 57.6. The headline index averages two very different realities.