New Zealand's Business NZ PMI contracts again to 43.1 in December versus 46.7 previous
New Zealand's Business NZ Performance of Manufacturing Index (PMI) contracted further to 43.1 in December, down from November's 46.7.
Despite the decline, NZ PMI activity is still up from October's low of 42.9, but still represents the ninth consecutive month of contraction in manufacturing activity in New Zealand.
According to Business NZ:
The proportion of negative comments stood at 58.7%, which was down from 65.1% in October and 68.8% in September. A general lack of demand and sales was the overriding theme mentioned by many manufacturers.
BNZ Senior Economist, Craig Ebert stated that “at the heart of the recent poor run in the PMI has been its production index. While this improved a bit in November, it was, at 43.6, almost 10 index points south of its long-term average. That’s a big undershoot, in historical context”.
Market Reaction
The NZD/USD is looking for a boost as the pair waffles into the midrange heading into Friday's market session, testing near 0.6120 and seeing intraday technical resistance at the 50-hour Simple Moving Average (SMA).
NZD/USD Hourly Chart
About the Business NZ PMI
The Business NZ Performance of Manufacturing Index (PMI), released by Business NZ on a monthly basis, is a leading indicator gauging business activity in New Zealand’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production or employment.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the New Zealand Dollar (NZD). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for NZD.