New Zealand Composite PMI Hits 11-Month Low

The BusinessNZ Performance of Composite Index dropped to 48.4 in May 2026 from a downwardly revised 49.2 in the previous month. It marked the third straight contraction and the steepest pace since June 2025, as the services sector contracted for the fourth consecutive month, while manufacturing registered its first contraction in 11 months. The latest figures highlighted the impact of the Middle East conflict. Employment in the manufacturing sector fell for the first time in eight months, while production remained stable after expanding in April. Meanwhile, all five of the other services-sector sub-indices remained in contraction territory, with activity/sales recording the steepest contraction, followed by stocks, new orders, employment, and supplier deliveries.

The BusinessNZ Performance of Composite Index rose to 49.4 in April 2026 from a downwardly revised 48.7 in the previous month, which was the lowest reading since last August. It marked the second straight contraction, though at a softer pace, as the services sector contracted for the third consecutive month, while manufacturing recorded the softest expansion in seven months. New orders in the manufacturing sectors contracted after growing in March, delivery times lengthened further, while production growth and finished stocks eased. Meanwhile, employment increased at a faster pace. On the other hand, despite the softer expansion in April, new orders in the services sector returned to growth, while the other four sub-indexes remained in contraction territory, with supplier deliveries posting the weakest reading.

The BusinessNZ Performance of Composite Index fell to 48.8 in March 2026 from a downwardly revised 50.1 in the previous month, marking the lowest reading since last August. The latest reading was also the first contraction in four months, as the services sector contracted at the fastest pace in 10 months, while manufacturing marked the softest expansion since last November. New orders, finished stocks, production, and employment remained in expansion, led by new orders despite a downturn from the previous month, while deliveries stabilized. “So poor was the PSI reading that our combined PMI/PSI indicator is suggesting the economy could soon be contracting. While we are not forecasting a recession, these data support our recent decision to significantly downgrade our growth expectations for 2026,” BNZ’s Head of Research, Stephen Toplis, said