A private measure of New Zealand’s manufacturing sector weakened in January, signaling a potential slowdown in the country’s industrial sector.
The Business NZ performance of manufacturing index (PMI) came in at 51.6 in January, after going unchanged the previous month. On the PMI scale, 50 separates expansion from contraction.
The manufacturing sector ended 2016 on a firm note, with the PMI indicator averaging a healthy 56.0 throughout the year. Business sentiment within the sector also improved toward the end of the year, with seasonal factors having a positive influence.
Manufacturing jobs are in high demand and short supply throughout New Zealand, according to Trade Me, a local job ad website. Vacancies on the site were up 16.4% in January from a year earlier, with manufacturing topping the list. Vacancies for manufacturing positions were up nearly 43% compared to last year, the website said.
The country’s booming construction sector continues to be one of the strongest catalysts for job creation. Net migration and a strong local economy have raised demand for residential housing, a trend expected to continue for the foreseeable future.
New Zealand also experienced high demand for temporary workers in demolition and engineering after the November earthquakes.
The New Zealand economy is projected to grow around 3% annually over the next few years, outpacing virtually all of its advanced industrialized peers. Broad economic growth will likely support sustained expansion in the country’s manufacturing sector.