Sharechat Logo

NZ manufacturing activity lifts in November, points to solid economic growth

Friday 15th December 2017

Text too small?

New Zealand's manufacturing activity lifted in November, reversing October's post-election slide and pointing to solid economic growth in the sector. 

The BusinessNZ-Bank of New Zealand performance of manufacturing index rose 0.4 of a point to a seasonally adjusted 57.7 in November, continuing its run of expansionary readings above 50 in every month since October 2012.

"Various recent surveys have seen business confidence falter during and after the government formation process. In contrast, the performance of manufacturing index, notably a survey of business outcomes rather than sentiment, has remained rock solid over recent months," said BNZ senior economist Doug Steel. 

Four of the five sub-indices rose, with production up 1.2 points to 62.1, employment up 2.6 points to 54.2, finished stocks up 1.9 points to 57.5 and deliveries up 0.8 of a point to 58.9. New orders, however, dipped 2.3 points to 57.6. 

Steel noted production "led the charge," reaching its highest level since mid-2013. It supports the idea that manufacturing gross domestic product has accelerated in the final quarter of the year, after what looked like a solid third quarter, he said.  Steel said he expects next week's GDP data to show that manufacturing GDP rose around 1 percent in the third quarter. "All up, it's positive momentum in output," he said. 

While the PMI is strong, there are some details worth monitoring as "possible vulnerabilities," Steel said. The PMI inventories index is now at the highest level since the survey started back in 2002 and while there are signs of demand "it would be remiss to not consider the inventory build as a potential vulnerability if future demand were to disappoint expectations," he said. 

Steel also said another area to watch is food processing with its PMI jumping up to a heady unadjusted 74.5, its second-highest ever level behind November 2012’s 79. "This has the potential to pull back if spreading dry weather conditions were to dent primary production," he said. 


Father's Day SOON! Crazy Deals on ALL IRG Yearbooks - More than 50% OFF - $19.99 for 44th IRG Yearbook 2018-2019

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar rises after Orr talks up the economy
Comvita posts $27.7m net loss on goodwill write-downs
Buyers emerge for Denton Morrell client book
WEL reviewing capital structure of fibre business
Cavalier announces strategic collaboration with NZ Merino Company
Delegat continues to invest after record year
Kiwibank's annual profit eases as fee income drops
TIL lifts operating earnings, watching for slowdown
Vector profit slides 44% on struggling HRV writedown
Steel & Tube returns to the black but says margins are squeezed

IRG See IRG research reports