The BusinessNZ Performance of Manufacturing Index (PMI) in New Zealand dropped to 47.5 in May, down from 53.3 in April, signaling a return to contraction after four consecutive months of expansion. The decline reflects a sharp loss of momentum in the sector, which had shown signs of recovery earlier in the year. Four of the five main sub-indices fell, with New Orders at 45.3 and Employment sinking 8.9 points to 45.7, its lowest level since July 2024. Negative sentiment among respondents rose to 64.5%, compared to 58% in April. Manufacturers cited falling demand, weak orders, and low business confidence as major challenges. Additional pressures included rising costs, economic uncertainty, and stalled forward orders and investment.