NZ manufacturing activity continues to rise in January, signalling economic expansion

Thursday 11th February 2016

New Zealand manufacturing activity rose to a 15-month high in January, with an uptick in production and employment pointing to further improvements ahead, though not across all industries.

The BNZ-BusinessNZ performance of manufacturing index rose to a seasonally adjusted 57.9 last month from 57.0 in December, its highest level since October 2014. New Zealand's manufacturing sector has been expanding since October 2012, where a reading of 50 separates expansion from contraction.

The latest monthly reading showed an improvement across three of the five sub-sectors of the index, with the measure of production reaching a 14-month high 60.3, up from December's 57.1.

Employment also picked up to a seasonally adjusted 54.9 in January, from 53.5 in December, having averaged 50.5 since August 2002. January's score indicates employment is expanding at the fastest rate since October 2014.

"This gives us some confidence that staffing levels in the sector will continue to expand," Bank of New Zealand senior economist Craig Ebert said in his report. "The broad results in January’s PMI are very encouraging."

Ebert said manufacturing was not running at the same speed in every sector, with printing, publishing and recorded media lagging behind more robust industries such as food and beverage. Waikato/Bay of Plenty wasn't keeping pace on a regional basis, while firms with large workforces around the country were behind those with smaller staffs, he said.

The PMI showed the measure of deliveries increased to 58.4 from 57.7 in December, while new orders dipped to 59.8 from 59.9, and finished stocks fell to 53.6 from 54.8.

BusinessDesk.co.nz

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