New Zealand manufacturing activity held strong in February with the PMI at 55.0, marking the first three-month run above 55 since mid-2021.

Summary:

• New Zealand manufacturing PMI held at 55.0 in February, signalling continued expansion.

• Result was almost unchanged from January’s 55.1 and above the long-run average of 52.5.

• Marks the first three-month run above 55 since mid-2021.

• New orders (57.6) and production (56.7) led the expansion.

• Employment eased slightly but remained in expansion at 50.4.

• Manufacturers reported stronger orders, enquiries and export demand.

New Zealand’s manufacturing sector continued to expand solidly in February, with activity holding at elevated levels for a third straight month, according to the latest BNZ–BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI came in at 55.0 in February, almost unchanged from 55.1 in January and comfortably above the survey’s long-run average of 52.5. Readings above 50 indicate expansion in manufacturing activity.

The latest result also marks an important milestone for the sector. BusinessNZ Director of Advocacy Catherine Beard noted that February represents the first time since mid-2021 that the PMI has recorded three consecutive months at 55 or higher, suggesting a sustained pickup in manufacturing conditions after a softer period over the past couple of years.

Encouragingly, all five of the survey’s sub-indices remained in expansion territory during the month. The strongest components were new orders (57.6) and production (56.7), both of which point to firm underlying demand and a solid pipeline of work for manufacturers.

Other indicators also showed continued, if more modest, gains. Deliveries registered 51.0, signalling slightly faster supplier activity, while employment edged down from January but remained in expansion at 50.4. Although the labour component softened slightly, the overall result suggests manufacturers are broadly maintaining staffing levels as activity improves.

Sentiment among manufacturers also improved during the month. The proportion of positive comments from survey respondents rose to 55.5%, up from 47.7% in January, though slightly below December’s 57.1% reading. Businesses reported an increase in orders, enquiries and sales, with some pointing to stronger export demand and improving conditions in parts of the manufacturing sector. Others noted a growing pipeline of work and signs of gradually improving business confidence.

BNZ Senior Economist Doug Steel cautioned that the survey period largely predates the latest geopolitical developments in the Middle East, which have recently dominated global market attention. Even so, he said the February result provides a reassuring snapshot of the sector’s momentum.

According to Steel, the PMI reading well above the 50 breakeven level indicates the manufacturing sector is entering the current period of heightened global uncertainty from a relatively solid position. While external risks could influence activity in coming months, February’s data suggest the sector continues to build momentum as demand conditions gradually improve.