Manufacturing in freefall

News today that Manufacturing index numbers have crashed nearly 6 per cent in March, is yet another sign of an economy going backwards, says Labour’s Economic Development spokesperson David Cunliffe.

According to Business New Zealand, the seasonally adjusted Performance of Manufacturing Index (PMI) for April was 48.0[1]. This was 5.8 points down from March, and the lowest level of activity since November 2011.

“Of particular concern is that the fall has been led down by lower production and new orders, and that this April decline is very large,” David Cunliffe said.

“Manufacturing is down drastically in regions like Otago/Southland (PMI 38.3), where just this week Steven Joyce walked away from the Dunedin Economic Development Strategy.

“This is on top of the Government’s decision to turn a blind eye to the disastrous consequences of closing KiwiRail’s Hillside Workshops,” David Cunliffe said.

“Even worse is the latest rise in the unemployment rate back up to a tragic 6.7 per cent, a huge disappointment for the thousands of families struggling to regain their dignity and a regular earned income.

“With a high and volatile exchange rate, continual delays in the Christchurch rebuild, and a lack of cash in the hands of ordinary New Zealanders, it is little wonder that our manufacturing sector is taking a hammering,” David Cunliffe said.

“All this only reconfirms what Labour has been saying: our economy is struggling to get out of the rut and the Government’s lack of a plan is not working.

“A ‘Zero Budget’ is what you get when you have a failing economy.

“Austerity economics will do nothing to help manufacturing, exporting or employment to claw its way out of the hole the New Zealand economy is in,”  David Cunliffe said.

[1] A PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining.