New Zealand’s factories kept growing in August for the 14th month in a row, and the strongest growth was in the south. The BNZ – BusinessNZ Performance of Manufacturing Index (PMI), released on Friday 11 September, came in at 53.1. That was down from 54.3 in July but still above the survey’s long-term average of 52.5.
The index is built from a monthly survey of manufacturers. A reading above 50 means the sector as a whole is expanding and a reading below 50 means it is shrinking. August’s result shows the sector was still growing, just at a slower pace than in July.
The regional figures show how uneven that growth is. Otago recorded 62.9 and Canterbury 57.8, while the Northern and Central regions sat at 50.6 and 50.7, barely above the line between growth and contraction. The regional numbers are not seasonally adjusted, so they can swing more from month to month than the national figure. Even so, the gap between the south and the rest of the country was wide. The Government said all four regions expanded in August for the first time since March.
BNZ’s manufacturing snapshot said growth was broadening even though the headline number fell. Every industry group except the one labelled “Other” expanded, and food and beverage, textiles and non-metal manufacturing all moved from contraction back into growth. BNZ said the dip in the headline figure came from lower readings in industries that had previously been stronger, including metal manufacturing and printing and publishing, rather than a general weakening.
New orders, a pointer to work in the pipeline, rose to 54.9 from 53.6 in July. Production eased to 54.2 from 57.1 and deliveries to 52.6 from 55.5. Stocks of finished goods climbed to 56.4 from 53.4, the highest of the five measures. Employment was the weakest, slipping to exactly 50.0 from 52.2. That flat reading means manufacturers overall were neither adding nor shedding staff over the month.
BusinessNZ director of advocacy Catherine Beard said employment was the measure to watch. “It’s pleasing to see manufacturing hold onto expansion, now well over a year running, even as the pace eases back. Employment is the area we’re watching most closely, sitting right on the breakeven mark at 50.0,” she said.
Beard said respondents continued to point to cost of living pressures and the conflict in the Middle East as reasons for holding back, “but New Orders and Finished Stocks remaining comfortably in expansion suggests there’s still genuine underlying demand.”
BNZ senior economist Doug Steel said the monthly dip should be read against a rising trend. “Although weaker than July’s 54.3 print, the 3-month moving average of the PMI continues to rise, indicating the industry is performing well through monthly volatility,” he said.
According to the Government, the average for June to August was 55.8, the highest since July 2021. The index has swung sharply this year. It was 50.5 in April and 51.5 in May before jumping to an unusually high 60.1 in June, and that June reading is still lifting the three-month average. A year earlier, in August 2025, the index stood at 50.6.
The comments from manufacturers were less cheerful than the numbers. BusinessNZ said 55.7% of respondents’ comments were negative, although a good number pointed to steady or improving order books. BNZ said higher freight and material costs, uncertainty from the Middle East conflict and the general election were among the concerns raised. It also flagged the build-up of finished stock as worth keeping an eye on, saying it could become a problem if demand falters.
Small Business and Manufacturing Minister Cameron Brewer welcomed the result in a statement. “Manufacturing has now grown for more than a year straight, and what’s really encouraging is how widely that growth is spreading. More parts of the industry, and more parts of the country, are getting busier,” he said.
Brewer linked the rise in orders to the Government’s Investment Boost scheme, saying it lets manufacturers “buy the machinery and equipment that lifts productivity.” He also said New Zealand manufacturers were “outpacing Australia, the United Kingdom, the Eurozone and China, and running ahead of the global average.”
The J.P. Morgan global manufacturing figures published alongside the index bear that out. New Zealand’s 53.1 was ahead of the Eurozone at 52.7, Australia at 52.0, the United Kingdom at 51.7 and China at 51.5, and above the global reading of 52.3. New Zealand sat behind the United States at 53.9 and Japan at 54.9.
Manufacturing matters well beyond the factory floor. The Government said the sector directly employs more than 220,000 people, contributes around 8% of GDP and accounts for around 60% of New Zealand’s goods exports.
BNZ said August’s figures paint a positive picture for economic momentum in the September quarter and support its forecast that annual GDP growth will be around 2% into the second half of 2026. Stats NZ is due to publish GDP figures for the June quarter on 17 September, BNZ noted.
More readings are close behind. BusinessNZ’s services index for August is due on Monday 14 September, and the manufacturing index for September follows on 16 October, according to its release schedule.
Do you work in manufacturing? Is your order book filling up or thinning out, and are you hiring? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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