New Zealand Factory Activity Growth Eases

The Business NZ Performance of Manufacturing Index in New Zealand fell to 54.3 in July, down from an upwardly revised 60.1 in June, marking the 21st consecutive month of expansion and remaining well above the long-term average of 52.5. The deceleration in factory activity came as all of the sub-indices expanded at a softer rate. New orders (53.3 vs 64.1 in June), production (57.3 vs 59.2), deliveries (55.8 vs 57.6), stocks of finished products (53.2 vs 56.9), and employment (52.8 vs 55.6) were all well above the 50.0 mark, but expanded at a slower rate. " Respondents continue to point to the conflict in the Middle East, high fuel and raw material costs, and a general reluctance from customers to spend, with a number also citing uncertainty ahead of the election," said BusinessNZ’s Director of Advocacy, Catherine Beard.

The Business NZ Performance of Manufacturing Index in New Zealand increased to 59.7 in June, up from an upwardly revised 51.3 in May, marking the twelfth consecutive month of expansion and well above the long-term average of 52.5. It was the strongest growth in factory activity since July 2021, with new orders being the standout at 64.1 (vs 53.2 in May), pointing to a healthy pipeline of work ahead. Meanwhile, production surged to 59.4 (vs 50.6), while deliveries rose to 57.3 (vs 52.9). Stocks of finished products (56.9 vs 54.3) and employment (55.8 vs 51.4) were also well above the 50.0 mark, an encouraging sign for manufacturing hiring. " There are still real headwinds with the conflict in the Middle East and high fuel prices continuing to be a factor for many respondents, but this month's result reflects a huge positive shift after a long stretch of soft results, which is a very welcome turn," said BusinessNZ’s Director of Advocacy, Catherine Beard.

The Business NZ Performance of Manufacturing Index in New Zealand declined to 49.9 in May, down from a downwardly revised 50.4 in April, marking the first contraction since June 2025 and falling below the long-term average of 52.5. The latest result highlighted that the war in Iran weighed heavily on the index, with the employment sub-index moving into negative territory (49.6 vs 53.2 in April), while production remained stable after expanding in April (50.0 vs 51.4). The contraction was partially offset by finished stocks, which remained in expansion territory (53.8 vs 50.7), while deliveries (51.9 vs 46.8) and new orders (50.1 vs 48.0) both rebounded into expansion territory. "We believe the sector is likely to go through a flat patch during winter but, Middle East willing, we still think the broader economy can pick up some momentum at the tail end of this year, so there is no reason to believe manufacturing will be an exception," BNZ Head of Research, Stephen Toplis, said.