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New Zealand Factory PMI Signals Recovery

New Zealand's manufacturing sector showed some signs of recovery in May albeit off a very low base, survey data from BusinessNZ showed Friday.

The performance of manufacturing index rose to 39.7 in May from 25.9 in April. However, a score below 50 indicates contraction.

Given half of May was at alert level 2, this provided firms with a greater ability to boost production and new orders, which was seen in those two sub-indices showing the strongest increases from the previous month, BusinessNZ's executive director for manufacturing Catherine Beard said.

The production index advanced to 38.4 from 19.1 and the new orders index reached 40 versus 16.9 in the previous month.

Meanwhile, the employment indicator fell to 39.4 from 41.1. A soft employment result in the months ahead may make the road to recovery that bit longer, Beard noted.

BNZ Senior Economist, Craig Ebert said that "still, a negative tone remains evident in the fact that, even with its bounce in May, the NZ PMI merely got back to the sort of levels in sank to during the 2008/09 recession."

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