Manufacturing News

Australia helps NZ manufacturing expand in July

Australian consumers have contributed to the strong performance of New Zealand’s manufacturing sector last month as the country continues down the road of economic recovery.

The BNZ-Business New Zealand performance of manufacturing index reported a 1.1 point drop to 53.2 in July.

Despite the drop activity remained above the 50 level that separates contraction from expansion.

New orders recorded the biggest expansion at 56 for the month, followed by deliveries at 53.7 and employment at 52.2. Overall manufacturing production fell 0.6 points to 51.8 with finished stocks expanding at 50.7, the index revealed.

In a report accompany the index, BNZ economist Doug Steel said the New Zealand economy had the momentum to carry through the short term nervousness in world financial markets and dents in confidence.

Manufacturing has been one of the stronger performing industries in NZ according to recent economic surveys – a result which analysts didn’t expect to happen for a while, the New Zealand Herald reported.

The sector contributed up 12.5% of the gross domestic product in the three months ending March 31, and was the fastest growing sector at a quarterly pace of 3.6% for NZ.

One reason for the strong figures is the weak cross-rate between the Australian and New Zealand dollar, with the NZ dollar trading at almost 80 Australian cents this week.

Machinery and equipment manufacturers have been named as the fastest expanding sub-sector, followed by food, beverage and tobacco. Petroleum, coal, chemical and associated products has remained in contraction.

To read the New Zealand Herald report, click here.

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