New Zealand's Manufacturing Sector Remains in Contraction

By James Glynn

SYDNEY--New Zealand manufacturing sector showed tentative signs of recovery in April, despite the economy's lengthening recession, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index.

The seasonally adjusted PMI for April was 48.9, up from 46.8 in March, although still lower than the 49.1 recorded in February.

The sector has now been in contraction for 14 consecutive months.

Manufacturing production returned to expansion for the first time since January 2023, while manufacturing employment returned to slight expansion, the data showed.

Still, new orders remained firmly in contraction, while the proportion of negative comments again increased to 69% in April, compared with 65% in March and 62% in February.

An overall lack of sales and orders was the dominant theme in comments, along with a struggling economy, according to the survey.

The farm-rich economy remains in recession amid mounting evidence that elevated interest rates are causing growing financial stress.

The central bank left the official cash rate at 5.5% at its last policy meeting in April and indicated it still wasn't comfortable with the inflation outlook.

Meanwhile, New Zealand's unemployment rate jumped sharply in the first three months of this year.

Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

May 09, 2024 19:44 ET (23:44 GMT)

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