NZ manufacturing activity rises to 15-month high in October
New Zealand manufacturing activity accelerated for a fifth month to a 15-month high in October as a strong domestic economy supports local activity.
The BNZ-Business NZ performance of manufacturing index rose 0.8 points to a seasonally adjusted 59.3 in October from September, reaching the highest level since July 2013.
Manufacturing activity remained above the key 50 expansion level in all five sub-indices in October, and across all four of the country's regions. Growth in the New Zealand economy is supported by very strong migration-fuelled population growth, and evident in data showing increasing electronic card spending and rising non-residential construction activity, the BNZ said.
"Domestic demand indicators provide a positive backdrop for manufacturing," BNZ senior economist Doug Steel said in a note. "Confidence and activity indicators remain upbeat. On the downside, an anticipated marked drop in dairy sector revenue is expected to be a headwind."
The manufacturing index was led higher by production, which rose to a 15-month high of 62.5. The measure of new orders also gained to 61.8 while employment rose to 57.5, its highest level since the survey began in 2002. Deliveries and finished stocks eased from their month earlier levels but remained in expansion at 56.6 and 51.5 respectively.
Across the regions, Otago-Southland posted the highest activity at 70.6, followed by Canterbury/Westland at 61.6, Northern at 60.2 and Central on 56.6.
Food, beverage and tobacco manufacturing showed the strongest expansion at 74, followed by machinery and equipment manufacturing at 62.2, and textile, clothing, footwear and leather manufacturing at 60.7. Petroleum, coal, chemical and associated product manufacturing was at 58.8 and metal product manufacturing at 58.3.
Meantime, the proportion of positive comments for October at 68.7 percent was significantly higher than September at 56.8 percent August at 61.2 percent and July at 57.4 percent.