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NZ manufacturing sales volumes rise in June quarter as meat, dairy bounce back

Wednesday 7th September 2016

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New Zealand manufacturing sales activity rose in the June quarter as meat and dairy product processing recovered from a sharp decline at the start of the year. 

Total seasonally and price adjusted sales rose 2.8 percent in the three months ended June 30, turning around a 0.7 percent decline in the March period, Statistics New Zealand said. That was led by an 8.6 percent jump in the volume of meat and dairy product sales, recovering from a 6.7 percent drop in March. On a value basis, which doesn't adjust for inflation, sales rose 2.2 percent in the quarter, and meat and dairy sales rose a more modest 3.3 percent. 

"This quarter's large rise in meat and dairy manufacturing sales followed a sizeable fall in the March 2016 quarter," business indicators manager Tehseen Islam said in a statement. "Despite some large movements in recent quarters, the sales volumes for meat and dairy have increased just slightly from where they were in early 2014."

The country's manufacturing activity has been expanding since late October 2012 as the Canterbury earthquake rebuild started gathering momentum. While food product manufacturing is a major export for New Zealand, industrial production typically shows a strong link to building work and the country has a major construction pipeline with the finishing touches for Christchurch still to come and a house-building effort needed in Auckland.

Today's statistics show non-metallic mineral product sales, which spans glass, cement and concrete manufacturing, climbed 9.5 percent on a price-adjusted basis and was up 9 percent in value terms. In unadjusted terms, non-metallic mineral product sales rose 8.6 percent to $896 million in the June quarter from a year earlier, an increase of 8.2 percent in volume terms. 

Across all sectors, manufacturing sales rose 1.2 percent to $24.38 billion in the three months ended June 30 from the same period a year earlier, and was up 6 percent in volume terms. Closing stocks of raw materials shrank 2.1 percent to $3.9 billion from June 2015, while finished good inventories were down 8.4 percent to $8.51 billion. 

Seasonally and inflation adjusted petroleum and coal products sales fell 3.8 percent in the quarter and were down 2.2 percent including price changes. The value sales sank 16 percent to $1.71 billion from June 2015, though the volume of sales rose 13 percent, due to cheap international energy prices.

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