New Zealand manufacturing rebounded from a two-year low in February, led by improvement in new orders and deliveries and a recovery in the petroleum, coal and chemical sector.
The BNZ-Business NZ performance of manufacturing index rose to a seasonally adjusted 55.9 last month, rising 5.2 points from January reading of 50.9, the lowest level in two years. The index has been in expansion, at a level above 50, for 29 consecutive months.
The monthly snapshot shows all five sub-indices were in expansion, with new orders rising to 61.5, its highest level since November 2013, while deliveries increased to 58.2 its highest level since last September. Employment rose to 52.5 and production increased to 51.8. Finished stocks slipped to 54.3.
"New Zealand's Performance of Manufacturing Index (PMI) bounced back very well in February," Bank of New Zealand economist Craig Ebert said in a note. "This was driven mostly by the two components that caused all the consternation back in January, with the PMI production index increasing to 51.8 from 47.4, while the new-orders index rebounded right the way up to 61.5 from 50.1."
Across industry groups, petroleum, coal, chemical and associated product manufacturing jumped to 62.9 in February from 37.5 a month earlier, the lowest level since 2009 and when a global slump in oil prices weighed on the sector. Food, beverage and tobacco manufacturing posted a reading of 60, while machinery and equipment was little changed at 54.8. Metal product manufacturing improved to 53.3.
Activity across all four regions expanded in February. The Otago-Southland region increased to 60.7, while Canterbury Westland rose 7.5 points in the month to 55.8. The Northern region posted a reading of 54.9, while the Central region reported a reading of 55.4.