The December 2025 Performance of Manufacturing Index (PMI) for New Zealand surged to a four-year high of 56.1, significantly above its long-term average. BNZ economists find this "compelling" evidence of a genuine underlying improvement in the sector, driven by strong new orders, broad-based gains across all components, and supportive economic drivers like residential building and primary exports. This strong result suggests positive momentum for Q4 GDP and outperforms major international peers, though a persistent soft spot remains among the smallest manufacturing firms.
Major Bullet Points
📈 Record Performance: The PMI jumped to 56.1 in December, up from 51.7 in November. This is the best monthly result of 2025 and the strongest in four years.
✅ Signs of a Real Trend: The improvement is seen as credible and not a one-off, supported by four key factors:
A preceding buildup in promising new orders.
Broad-based gains across production, employment, and new orders (which hit 59.8).
Confirmation from other business surveys.
Fundamental economic drivers like rising construction activity and strong primary sector exports.
🌍 Global Outperformer: New Zealand's PMI (56.1) is outperforming the global average (50.4) and key comparators like Australia (51.6).
📊 Positive Economic Signal: The strength suggests upside risk to GDP forecasts for Q4 2025 and good momentum heading into 2026, reinforcing the previous quarter's GDP growth.
⚠️ Notable Soft Spot: Despite the overall strength, micro manufacturing firms (1-10 employees) remain a persistent area of weakness, with a sub-50 reading for a third consecutive year.
