Manufacturing Snapshot
Too soon?
The PMI remains at a healthy level. While it is no longer trending higher, it hasn’t been unduly hit by the fuel price surge and the uncertainty of war. At least not yet.
Stocking up
There is evidence of some temporary PMI support from spending being brought forward and businesses stockpiling. Stocks of finished products index jumped up to 54.0 in March, its highest level in a year.
Weaker sentiment
Although the activity indicators held up reasonably well, the proportion of positive comments in the survey tumbled from 55.5% to 38.0% in March.
Supply-driven oil price shock
The current surge in commodity prices is from a supply shock. This raises the prospect that currently rising prices are more likely to dampen manufacturing activity and economic growth, both in New Zealand and abroad.
