Manufacturing eases

Otago and Southland’s Performance of Manufacturing index was down in April but still shows...
Otago and Southland’s Performance of Manufacturing index was down in April but still shows manufacturing is continuing in expansion mode. PHOTO: ODT FILES
Overall activity in Otago and Southland’s manufacturing sector in April has fallen, the latest Performance of Manufacturing index shows.

The PMI reading of 57.7 points last month is down from 66.1 in March; a reading above 50 indicates manufacturing is generally expanding, below 50 that it is declining.

In the regional breakdown by categories, new orders and production levels are sitting above 60, while employment levels are above 50. Deliveries of raw materials remain the same, and stocks of finished products are in decline.

The proportion of positive comments was sitting above 60%, and it was pleasing to see continued demand within the construction sector in both the residential and commercial sides of the industry, Otago Southland Employers’ Association chief executive officer, Virginia Nicholls, said.

Local businesses were continuing to face ongoing supply chain challenges, largely due to disruption caused by Covid-19.

“As a result, manufacturers continue to hold more stock to compensate for this issue,” she said.

She said it was also clear that employers must be able to access skilled international workers despite ongoing border restrictions, as they were essential for improved productivity and business growth.

Employers also reported concerns about increasing prices for electricity and gas.

There was uncertainty among exporters regarding continued access into China.

Nationally, the BNZ-Business NZ PMI for April was 58.4, it was still the second highest result since July 2020.

 

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