FX.co ★ New Zealand Factory Activity Returns to Expansion in July

The BusinessNZ Performance of Manufacturing Index (PMI) in New Zealand increased to 52.8 in July, up from 48.8 in June, signaling a return to expansion after facing two months of contraction. All five major sub-indices experienced growth, with New Orders leading at 54.2 compared to 51.8 in June, and Production marking 53.6 up from 49.6, both reaching their highest points since 2022. Finished Stocks rose to 51.8 from 46.9, Deliveries of Raw Materials improved to 51.9 from 47.9, and Employment edged up to 50.1 from 48, slightly above the threshold after two months of decline. However, the rebound was tempered by the fact that 58.6% of respondents indicated unfavorable conditions, blaming weak demand, escalating costs, and economic uncertainty triggered by factors like tariffs, sluggish construction, and tepid consumer spending. Manufacturers continue to exercise caution, predominantly ordering only what is necessary for immediate requirements.