New Zealand’s manufacturing expansion accelerated sharply in September, with the BNZ–BusinessNZ PMI Manufacturing rising from 53.3 to 56.5, comfortably above the long-term average of 52.5. The 3.2-point increase marked the sector’s 15th consecutive month in expansion territory and signaled a notable strengthening in manufacturing activity. More importantly, all five sub-indices improved and remained above the 50 expansion threshold, suggesting that the acceleration was broadly supported rather than concentrated in a single component. The latest reading reinforces evidence that manufacturing activity is gaining momentum following August’s more moderate expansion.
Production and new orders provided the strongest evidence of improving manufacturing conditions, with both indices rising to 57.0 in September. Production strengthened from 54.2, while new orders increased from 55.2, indicating that faster activity was accompanied by a firmer flow of incoming business. Employment also returned to expansion, rising from 50.0 to 51.8, suggesting an improvement in manufacturers’ hiring conditions. Meanwhile, finished stocks increased from 56.6 to 59.0, while deliveries jumped from 52.8 to 58.8. BusinessNZ noted that the broad improvement helped alleviate earlier concerns about elevated inventory levels relative to other indicators. The combination of stronger production, orders and employment provides a more encouraging signal than the headline PMI increase alone.
Despite the stronger expansion, manufacturers continued to highlight elevated fuel prices, associated cost pressures and uncertainty surrounding the general election and potential further interest rate increases. These concerns suggest that businesses still face significant challenges even as operating conditions improve. Nevertheless, BNZ Senior Economist Doug Steel viewed September’s PMI as further evidence supporting moderate GDP growth in the second half of 2026, with manufacturing expected to make a positive contribution. The broad-based improvement strengthens the case for continued sectoral expansion, although persistent cost pressures and uncertainty could weigh on momentum in the coming months.
Data Summary — NZ September 2026 PMI Manufacturing
| Indicator | August | September |
|---|---|---|
| PMI Manufacturing | 53.3 | 56.5 |
| Production | 54.2 | 57.0 |
| New Orders | 55.2 | 57.0 |
| Employment | 50.0 | 51.8 |
| Finished Stocks | 56.6 | 59.0 |
| Deliveries | 52.8 | 58.8 |
Long-term PMI average: 52.5
Expansion streak: 15 consecutive months above 50.
Source: BNZ–BusinessNZ Performance of Manufacturing Index, September 2026, released October 16.
Key Takeaways
- Manufacturing expansion accelerates sharply: PMI Manufacturing rose from 53.3 to 56.5, comfortably above its long-term average of 52.5 and marking the 15th consecutive month of expansion.
- Production and new orders strengthen together: Production increased from 54.2 to 57.0, while New Orders rose from 55.2 to 57.0, suggesting that stronger manufacturing activity was supported by improving incoming business.
- Employment returns to expansion: The employment index increased from 50.0 to 51.8, indicating renewed growth in manufacturing employment, although the improvement remained more modest than in production and orders.
- All five components improve: Finished Stocks climbed to 59.0, while Deliveries surged to 58.8. Stronger production and new orders helped ease earlier concerns about elevated inventories.
- Cost pressures and uncertainty remain risks: Manufacturers continued highlighting elevated fuel costs, election uncertainty and the prospect of higher interest rates. Nevertheless, BNZ sees manufacturing contributing positively to moderate GDP growth in the second half of 2026.
