Summary:
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New Zealand’s manufacturing PMI rose to 56.1 in December, the highest since December 2021
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All five sub-indices expanded, led by a sharp rise in new orders and production
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Employment returned to growth after earlier declines during 2025
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Seasonal demand helped, but confidence, exports, and infrastructure work also supported activity
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BNZ sees upside risk to near-term GDP growth from the stronger PMI print
New Zealand’s manufacturing sector ended 2025 on a notably stronger footing, with activity rising to its highest level in three years, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
The seasonally adjusted PMI rose sharply to 56.1 in December, up 4.4 points from November and well above the long-run average of 52.5. A reading above 50 signals expansion, making December’s result the strongest since December 2021 and reinforcing signs that the sector has regained momentum late in the year.
Encouragingly, all five major sub-components of the index were in expansion territory during December. The improvement was led by New Orders, which surged to 59.8, its highest reading since July 2021, pointing to a meaningful lift in demand as the year closed. Production also recorded a solid increase, rising to 57.4, while Employment climbed to 53.8, continuing a gradual recovery after several months of contraction earlier in 2025.
Business sentiment also improved. The proportion of positive comments from survey respondents increased to 57.1% in December, up from 54.4% in November and just 45.9% in October. Manufacturers cited stronger seasonal demand linked to the Christmas period, which boosted domestic sales, orders, and near-term workloads.
Beyond seasonal factors, respondents also reported firmer underlying conditions. These included improving business and consumer confidence, increased export and forward orders, and incremental gains from new customers, product launches, and infrastructure-related work. Together, these factors suggest the rebound was not solely holiday-driven, but also supported by broader demand dynamics.
Commenting on the data, BusinessNZ Director of Advocacy Catherine Beard said the December result was a welcome way to end the year, noting that eight of the past twelve months had now recorded some degree of expansion. The broad-based nature of the improvement across all sub-indices was particularly encouraging.
From a macro perspective, BNZ Senior Economist Doug Steel said the PMI outcome was positive for fourth-quarter GDP calculations and pointed to solid momentum heading into 2026
