July 16, 2020 / 10:39 PM / 22 days ago

New Zealand manufacturing activity swings to expansionary territory

(Reuters) - Manufacturing activity in New Zealand moved back to expansionary territory in June after three months of contraction, helped by an easing of coronavirus-driven lockdowns and mobility restrictions, a survey showed on Friday.

The Bank of New Zealand-Business NZ’s seasonally adjusted Performance of Manufacturing Index (PMI) rose to 56.3 from 39.8 in May and 26 the month before.

This is the best result since April 2018.

A reading above 50 indicates an expansion in activity, while anything below that threshold indicates a contraction.

BusinessNZ’s executive director for manufacturing Catherine Beard said she welcomed the return to expansion but struck a cautious note.

The “one expansionary result does not represent a trend given ongoing offshore uncertainty around COVID-19,” she said. “A consistent trail of new orders over the coming months would go a long way towards ensuring the second half of 2020 is better than the first”. 

New orders jumped to 58.6 in June from 39.5 in May.

Reporting by Swati Pandey in Sydney; Editing by Chris Reese

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