NZ manufacturing grows, further expansion tipped

Photo / Dean Purcell

New Zealand manufacturing growth accelerated during April, after the Christchurch earthquake eroded a recovery in production earlier in the year.

The latest BNZ - BusinessNZ Performance of Manufacturing Index increased to 51.5 in April, up from 50.2 in March, but still lower than values recorded between November and February.

A PMI reading above 50.0 indicates that manufacturing is generally expanding, below 50.0 that it is declining.

Manufacturing took a hit in March after the February earthquake, which killed more than 180 people and caused some $15 billion of damage, eroded demand for new production.

BNZ economist Doug Steel said the April figures were encouraging, and leading indicators were pointing to an accleration in manufacturing activity in the next year or two, and a lift in construction as the initial hit from the earthquake abated.

"Fortunes are diverse across the manufacturing sector at present, given a raft of strong and competing influences. Pulling the threads together we find a sector that, on average, is still pushing forward - not fast expansion, but heading in the right direction."

Employment was the only index that contracted in the month at 49.9, with production at 50.8, new orders at 52.9 finished stock at 54.8 and deliveries at 51.6. Machinery and equipment manufacturing reported the biggest expansion at 59.

The proportion of negative comments dropped to 49 per cent in April, compared to 57 per cent in March.

- Susie Nordqvist / BusinessDesk