NZ manufacturing slips in January

Thursday 16th February 2012

New Zealand manufacturing weakened in January though it remained in expansion, led by food processing companies, suggesting the economy’s gradual recovery is on track.

The BNZ-BusinessNZ Performance of Manufacturing Index fell 1.1 points from December to 50.5. The food, beverage and tobacco sub-group stood at 65.4 on a scale where 50 marks the line between contraction and expansion, the fifth month in six that group has recorded a reading of 60-plus.

The January reading was “enough to maintain our mildly positive trend view on the manufacturing sector and the economy more generally,” said Doug Steel, economist at Bank of New Zealand.

Of the five diffusion indexes, three showed expansion in the latest month. Production was at 51.7, employment at 51.2 and new orders at 50.4. Finished stocks were unchanged from December at 49.9 and deliveries slipped back into contraction at 49.5.

Steel said a “reasonable lift” in demand/sales looked to be limiting the impact of inventory unwind following a very strong build-up in the third quarter.

(BusinessDesk)

BusinessDesk.co.nz

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