New Zealand's manufacturing sector continued to expand in July, but momentum slowed sharply as the BusinessNZ Performance of Manufacturing Index fell to 54.3 from a revised 59.7 in June, down from the 60.1 figure cited earlier. The reading remained above both the 50 threshold that separates expansion from contraction and the survey's long-term average of 52.5, but it marked a notable cooling after one of the strongest monthly readings in over a decade. The slowdown was led by weaker new orders and softer production, while employment slipped below 50, indicating hiring caution, and supplier deliveries also moved into contraction. The July pullback suggests the post-pandemic rebound in factory activity may be losing momentum even as the sector stays in growth mode, with supply chain strains, labor shortages and softer demand emerging as key headwinds. Manufacturing accounts for about 10% of New Zealand's GDP, making the PMI a closely watched signal for business planning and for policymakers assessing the growth outlook and the pace of monetary policy normalization.