It is reported that New Zealand's manufacturing sector fell in June 2012, shedding last month's gains, though activity continued to expand.
NZ Performance of Manufacturing Index fell a seasonally adjusted 5.6 points to 50.2 in June 2012 from a month earlier. That's the lowest June reading since 2009. A reading of 50 separates a contraction from an expansion.
Four of the five of the sub indexes fell, led by production which dropped 8 points to 50.8 and new orders which sank 6 points to 51.2. Employment slipped into contraction on 48.9 points, followed by deliveries down 5.5 points to 46.5. That's its lowest level since October 2011.
Bank of New Zealand economist Mr Doug Steel said in his report that "Being close to the breakeven 50 mark, June's result indicates an industry marking time following May's expansion. We are certainly of the view that an improving domestic construction sector, ongoing international market challenges and generally high currency will be some of the important macroeconomic influences for the manufacturing sector to roll with."
Among the sub groups, the stand outs were metal production manufacturing and machinery up 3.2 points to 55.9.
Mr Steel said that "Both industries' PMI were driven be new orders and production and may reflect the beginning of some traction in the long anticipated improvement of domestic construction. We anticipate a strong pick up in construction ahead residential building consents are now well off their lows."
Activity in machinery and equipment manufacturing, petroleum, coal, chemical and associated product tobacco and food, beverages all contracted in June 2012. The proportion of negative comments rose to 48.9% from 44.9%.
Mr Steel said that "Those providing negative comments tended to use general descriptors such as sluggish, slow and flat, while positive comments continued to mention Australia as a prime export market, while for others it was business as usual."
Globally, the JPMorgan Global Manufacturing PMI stood at 48.9 in June 2012. That's the first time it's contracted since November 2011.
Source - Business Desk
(www.steelguru.com)
