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Manufacturing activity in New Zealand is continuing to weaken, with a new survey showing contraction not seen for several years.
The manufacturing sector continued to weaken in June to reach one of its lowest levels of activity since the survey began, says to the Bank of New Zealand - Business NZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI for June stood at 45.7, which was 2.2 points down from May. This is the second lowest result recorded since the survey began in 2002. The lowest was a 43.7 recorded in November 2005.
This latest result is the third time in four months that the survey has shown a manufacturing contraction.
A PMI reading above 50 shows an expansion in manufacturing - below that is a decline.
The last period of contraction for the sector, during 2005, was mingled with months where overall activity levels expanded, said Business NZ.
Business NZ chief executive Phil O'Reilly said the current run of data is showing "a more persistent trend downwards."
"The first half of 2008 has been the toughest six months manufacturers have had to deal with for some time, with the possibility of ongoing contraction for the next half of 2008."
Activity in some sub sectors showed expansion, said O'Reilly, such as machinery and equipment, while the textile, clothing, footwear & leather sector has bounced back from a series of declines.
"However, almost three quarters of manufacturers are experiencing the outcomes of a general downturn in the economy, weak global growth, and rising costs of raw materials."
A global version of the Performance of Manufacturing Index had shown a fall in activity for the first time in five years, said O'Reilly, which "puts into context what New Zealand manufacturers are facing at present."
