NEW ZEALAND: PMI Suggests Better Growth Ahead, Food, Petrol & Airfare Prices Dip

The earlier BusinessNZ manufacturing PMI rose to 53.9 in Feb, from a revised 51.7 print in Jan, see the chart below (plotted against GDP growth). This is the highest reading since August 2022 and continues to point to an underlying recovery in NZ's business cycle. Other data showed food prices dipping 0.5%m/m, after a 1.9% gain in Jan. 

• On the PMI, all 5 sub indices are above 50 (per BBG), with the production gauge up to 52.4, employment at 54.
• BNZ stated: 'It is one of several indicators that suggests the broader economy is turning for the better. Indeed, it indicates the pickup may be a bit faster than we are currently forecasting. Still that stressed: "It is important to remember that any improvement in activity is coming from a weak base. Recent official data confirmed weak manufacturing sales in 4q last year". (via BBG).
• On food prices, the Feb drop was the largest since Oct last year. Still in y/y terms we edged up to 2.4%, from 2.3% in Jan.
• In terms of the other details, were saw petrol prices down 0.2% (after rising 4.0% in Jan), domestic and international air travel fell for the second straight month as well. Accommodation services were up 3.2% though in m/m terms.
• All of these segments, except for domestic air travel, are negative in y/y terms though. 

Fig 1: NZ Business NZ PMI Versus GDP Growth