According to the Business New Zealand BNZ Performance of Manufacturing Index (PMI), the manufacturing activity of October has virtually remained the same without any changes.

The PMI gets adjusted seasonally and in October it read 49.7, up by only 0.5 points from that of September. A figure lower to 50 implies contraction. Over the last four months, the PMI has been giving an average figure of 49.6, meaning there is a stalling in the recovery.

BNZ economist Philip Borkin is of the belief that the economic recovery has quite definitely run out of steam. It worries him that these figures differ from that of the global trends which are generally on an ongoing pick up in manufacturing activity.

In October, the support factors were a strong Australian economy and relatively low NZ dollar, thereby a weak domestic economy being the dominant factor.

There is doubt regarding what kind of impact there is from the high NZ dollar against the US dollar.

Moreover, the disruption due to the Canterbury earthquake is preventing the manufacturing activity in that area.

However, new orders and employment have slightly expanded and it is hoped there will be improvements soon in New Zealand.