New Zealand’s business manufacturing purchasing managers’ index expanded in the month of May on rise in production, deliveries and new orders. The monthly PMI provides an early indicator of New Zealand’s manufacturing sector, which accounts for roughly 12 percent of gross domestic product.
The business NZ performance of manufacturing index (PMI) rose to 57.1 in May from 56.5 in April on a scale where a reading above 50 indicates expansion in economic activity. Employment was also positive in May after remaining in contraction the previous month. The employment sub-index improved to 52.8.
“The production readings in the PMI have certainly kept our chins up, when recent results on manufacturing GDP have looked a bit wobbly,” said Craig Ebert, Senior Economist, BusinessNZ.
Meanwhile, the New Zealand economy expanded more than what was expected in the first quarter by 0.7 percent. The reading topped the Reserve Bank of New Zealand’s projection of 0.6 percent and was above the 0.5 percent median estimate of economists. In annualized terms, the economy grew 2.8 percent, data released by Statistics New Zealand showed Wednesday.
Further, construction also increased manifold, which contributed to the rise in PMI. Construction activity rose 4.9 percent, the fastest quarterly expansion since March 2014. Average home prices rose 10 percent annually in May, reaching an all-time high of USD 506,000, the Real Estate Institute of New Zealand reported earlier this week.
The New Zealand dollar held higher against the greenback Friday morning after a choppy week. At 5:10 GMT, NZD/USD pair remained flat at 0.7043.
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