New Zealand manufacturing falls back into contraction

New Zealand's manufacturing sector slipped back into contraction last month, according to the latest performance of manufacturing index (PMI) out Thursday. The BNZ-Business New Zealand PMI for November was 48.8, on a scale where above 50 indicates expansion and below 50 contraction. The level was 1.5 points down from October, giving the index a range of just 2.8 points over the last six months. Over the last quarter, the PMI had averaged 49.2, and the year to date at 51, following a general pattern at home and abroad, Business New Zealand executive director for manufacturing Catherine Beard said in a statement. "The last six months have seen little to write home about in terms of New Zealand manufacturing. Sluggish production and new orders has meant the overall result has had little chance to show stronger activity levels, while employment in the sector remains in contraction," said Beard. "However, we are no different from most other countries at present, as the JPMorgan Global PMI remains in decline, along with our closest economic neighbors across the Tasman fairing worse than us with overall activity down to 43.6." BNZ economist Doug Steel said many factors were influencing manufacturing some positive and some negative. "While the overall results have been relatively stable of late, there continues to be considerable variation in the details. The accumulating evidence of improvement in construction activity gives some cautious optimism for 2013, amid some obvious strong headwinds such as the strong New Zealand dollar and patchy international demand," Steel said in the statement. Two of the five seasonally adjusted main diffusion indices were in expansion in November. However, the key indices of production (49.3) and new orders ( 50) showed minor contraction and no change respectively, while finished stocks (53.4) continued upwards for a fourth straight month. Deliveries (51.8) also showed some expansion, and employment (48.2) fell 0.9 points from October to continue six straight months of contraction.