The Ai Group Performance of Manufacturing Index (PMI) has jumped 9.4 points to 53.7 after four months of contraction, led by shopper demand for food, personal care and other essential household goods.
Local businesses that manufacture items such as processed food, toilet paper, cleaning products were recognised as key contributors to the overall improvement in PMI.
Ai Group CEO Innes Willox said some domestic manufacturers were impacted by COVID-19 in “different ways”.
“Some are stepping up to meet surges in purchasing from consumers, businesses and the health sector,” he said.
“Others are finding that disrupted supply chains into export markets and from suppliers of inputs are reducing sales and stifling production.
“Others are seeing sales dry up as their customers reduce orders to reflect their own demand and supply conditions.”
Willox said the aggregate impact for the manufacturing sector in March saw a slight increase in production, strong growth in sales and employment and more new orders.
Five of the seven activity indices in the PMI expanded in March, with a “clear divergence” between manufacturing sectors, according to Ai Group statistics. This included consumption of food and other household manufactured goods, which led to increased sales figures, production, new orders, finished stocks, and deliveries.
Food and beverage manufacturing sectors remained unchanged at 59 points and the chemicals industry increased by 1.2 points to 50.1 points. Both sectors reported a spike in sales, production and new orders, while the other manufacturing sectors all contract during difficult trading periods.
“With over 920,000 jobs at stake, and much of the sector critical to the supply of food, sanitisation and health needs and the infrastructure and supply chains that support them, every effort should be made to keep manufacturing businesses going for as long as they can operate safely,” Willox said.