New Zealand's manufacturing sector experienced its second quarter climbing out of a ten year trough in the three months to March, as the value of seasonally adjusted manufacuring sales rose 1.9% after taking into account inflation, figures from Statistics New Zealand show.
The rise over the quarter from December was "unusually" led by industries other than meat and dairy manufacturing, Stats NZ business statistics manager Louise Holmes-Oliver said.
The 1.9% rise followed a 3.7% rise in the December quarter after three consecutive quarters of decline.
"It appears manufacturing volumes continue to rise after reaching their lowest level in more than 10 years,” Holmes-Oliver said.
The main contributors to the rise in the volume of manufacturing were: transport equipment, machinery, and equipment manufacturing (up 11.9%), chemical, polymer, and rubber product manufacturing (up 5.0%), and wood and paper product manufacturing (up 4.1%).
Partly offsetting these volume rises was a 12.9% fall in the printing industry and a 3.3% fall in petroleum and coal product manufacturing.
In constant prices manufacturing sales rose by a seasonally adjusted 2.9% in the March quarter from December.
Activity on the rise
The Stats NZ figures came after Business New Zealand last week said activity the manufacturing sector continued to expand during the month of May, with the level of expansion the highest since mid-2010.
“Although there have been some recent publicly announced layoffs in the sector, overall the manufacturing sector has shown signs of resilience, even in the face of a high dollar versus the US dollar. It is particularly pleasing to see such a positive result from Canterbury manufacturers, which have come back quite quickly into expansion mode after the February earthquake in a relatively short space of time,” Business NZ executive director for manufacturing Catherine Beard said releasing the BNZ-Business NZ Performance of Manufacturing Index (PMI).
“Official data has shown a lift in total manufacturing sales, while manufacturing sector exports have also been steadily rising. Add to that the latest PMI result showing a pick-up in production and new orders and the sector is showing encouraging signs after a turbulent time of late,” Beard said.
Services sector on the rise too...
Meanwhile another measure of economic activity showed activity in New Zealand's services sector expanded in May, and despite a slower rate of expansion was the fastest monthly rate of growth since September 2010.
The BNZ-Business NZ Performance of Services Index (PSI) came in at 52.8 in May, up slightly from April. A figure over 50 indicates expansion in activity. Services makes up for roughly tow-thids of New Zealand's Gross Domestic Product (GDP).
Business NZ chief executive Phil O’Reilly said that the gradual improvement in activity for each of the last four months was positive, but there was still a way to go to get consistent expansion across regions and sub-sectors of the services industry.
“The recovery could best be described as lumpy, with certain regions and sub-sectors struggling to break into expansion mode. In addition, the sub-index for employment shows businesses still tentative about hiring new staff, although a pick-up in new orders/business for May may help feed through into the other indexes over the next few months," O'Reilly said.
(Updates with PSI, PMI, chart)
The chart below measures a composite index of the PMI and PSI:
Performance composite index
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3 Comments
Minister Joyce are you listening - argument cheap is stupid.
Great to hear that other segments then agriculture in the real production sector succeed – improving economic balance. Not only NZmanufacturing- including exports would be more successful, the government allocating high tech infrastructure needs to NZcompanies, would also decrease unemployment, our account deficit and add most needed skill to our workforce.
Manufacturing is important minister Joyce/ PM and should be developed properly in this country.
Minister Joyce, considering the current worldwide economic circumstances with the risk of an increased unemployment scenario, the important private NZmanufacturing sector can only develop into a solid economic force supported by the government.
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