We have previously discussed that the PMI needs to start lifting soon to be consistent with the shape of economic recovery that we (and the RBNZ) are forecasting.
The PMI details added to the sense of improvement. The biggest gains were in the areas one would expect to see first in a cyclical recovery – namely new orders and production.
Manufacturing is expected to make a positive contribution to Q3 GDP thanks, in part, to restarts of some major plants and a bounce in meat processing.
For all the encouraging signs in new orders and production, the PMI employment index remained weak at 48.1 in October.
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