Friday 14th December 2018
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New Zealand manufacturing activity grew at a slightly slower pace last month, hovering around its long-run average, as the sector recovers from a mid-year lull.
The BNZ-BusinessNZ performance of manufacturing index decreased 0.2 points to a seasonally adjusted 53.5 in November, holding near the 53.7 long-run average. A reading above 50 separates expansion from contraction.
Manufacturing activity slowed mid-year and government figures last week showed manufacturing sales shrank for a second quarter in the three months through September, on lower volumes of meat and dairy products.
"The improvement in the PMI since July has been underpinned by a pick-up in new orders, which achieved 56.3 in November," Bank of New Zealand senior economist Craig Ebert said in a note. "This level is usually a good portent that production will expand relatively well in the near term."
The PMI's production measure fell 1.4 points to 51.5 in November, and employment was down 1.1 points at 51.3. New orders eased 0.7 of a point to 56.3. Finished stocks rose 1.1 points to 54.2 and deliveries were up 1.7 points at 52.5.
Ebert said production has been expanding at a below-average rate, but has improved since the September quarter. Despite that softness, strong prices had supported New Zealand's high terms of trade, he said.
BusinessNZ's manufacturing executive director Catherine Beard said the level of activity was in line with the long-run average and was a positive end to 2018 after a lacklustre middle of the year.
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