NZ manufacturing rises with construction growth
By Tina Morrison
New Zealand manufacturing activity rose to a 14-month high in December, with an uptick in new orders pointing to further improvements ahead.
The BNZ-BusinessNZ performance of manufacturing index rose to a seasonally adjusted 56.7 last month from 54.9 in November, and was at its highest level since October 2014. A reading of 50 separates expansion from contraction.
The manufacturing gauge averaged 54.2 over last year, lagging behind the 56 level of the previous two years, as growth moderated in the first half of 2015 before picking up again.
The latest monthly reading showed new orders at a 10-month high, boding well for the outlook.
"Pleasingly, new orders kept leading the way," Bank of New Zealand senior economist Craig Ebert said in his report.
"This is a good sign for upcoming output, which is already running robustly in the PMI."
Ebert said manufacturing was being underpinned by the construction industry, which looks to be heading higher, having flattened off a bit over mid-2014 to mid-2015.
The PMI showed the measure of new orders increased to 59.7 from 58.1 in November, while deliveries advanced to 57.4 from 55. Production gained to 56.1 from 53.9, and finished stocks rose to 54.1 from 50.1.
Meanwhile, the employment measure slipped to 53 from 53.8 although Ebert noted the trends were still "nicely expansive".