Manufacturing volumes sank to five-year low last quarter

Monday 15th December 2008

New Zealand manufacturing sank to a five-year low in the third quarter, helping stoke expectations that the domestic economy contracted for a third straight quarter.

The volume of manufacturing sales fell 2.3% to the lowest level since the second half of 2003, according to Statistics New Zealand. The decline was paced by falls in metal products, paper and machinery. The value of manufacturing sales rose 1.3% in the latest quarter.

The manufacturing report helps economists conclude their estimates for third-quarter gross domestic product, which is expected to show a contraction of 0.4%, based on a Reuters survey. It follows the release on Dec. 11 of the Bank of New Zealand-Business NZ Performance of Manufacturing Index, which showed activity sank to a record low in November, with output falling to 29.3, the first time it has fallen below 30.

Today's survey of manufacturing shows the volume of manufacturing sales excluding meat and dairy fell 3.2%. Manufacturing activity rose by an 8.5% annual pace in the third quarter.

By Jonathan Underhill

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