New Zealand manufacturing expanded for a third month to reach the highest level in a year in February, driven by an accelerating pace of production and new orders.
BNZ-Business New Zealand Performance of Manufacturing Index rose 1.1 points to 56.3, the highest since February 2012. All five of the seasonally adjusted diffusion indexes expanded last month.
Food, beverage and tobacco manufacturing was the fastest growing sector, with a reading of 67.8, which bank of New Zealand economist Craig Ebert said may reflect increased meat processing in the face of drought. That would be offset, though, by reduced milk processing, he said. Production sped to 61.4 from 57.7 in January.
"We have to take today's PMI as encouraging," Ebert said. "It outlines that production is picking up and will keep doing so if new orders are any guide."
He noted that the performance of manufacturing was still patchy, with metal product manufacturing in contraction with a reading of 46.4.
New orders were at 58.2 on the scale where 50 separates expansion from contraction, the strongest since February last year. Employment was on 50.1, the first time that measure hasn't contracted since May 2012. Finished stocks on 51.8 and deliveries on 53.9 both slipped from the previous month.