Although meat and dairying lifted manufacturing sales for the quarter to june by 0.4 per cent, the rise was less than expected by analysts and may yet affect pending gross domestic data for the period.
Statistics NZ manufacturing manager Sue Chapman said the volume of meat and dairy product manufacturing rose in the June quarter, the sales values rise coinciding with high prices.
"The rise in the meat and dairy sales volume followed falls in the previous two quarters," she said in a statement.
After adjusting for seasonal effects and removing price changes, the meat and dairy product manufacturing volume rose 8.2% for the quarter, she said. When price changes were included, the value of manufacturing sales was up by $2.3 billion to $26.6 billion in the June quarter, compared with the corresponding period last year.
Second quarter gross domestic product data is due out on September 21.
ASB senior economist Mark Smith said much of the volatility in overall manufacturing volumes continued to be driven by fluctuations in meat and dairy volumes, which rebounded 8.2% in the second quarter, following their first quarter slump. "High livestock slaughter and rising dairy production were likely influences behind the second quarter lift," he said in a statement.
He said readings within the ex-primary sector, within the broader GDP data, were weaker than expected and pointed to a second quarter decline in that sector.
"This is more likely to ensure a decline in overall manufacturing activity in second quarter GDP, offsetting an expected positive contribution from food manufacturing, driven by rising livestock slaughter and milk production," Mr Smith said.
The outlook for manufacturing activity remained " positive" despite yesterday's weaker than expected result for core manufacturing.
"However, with the apparent levelling off in construction sector activity, heightened levels of election-related uncertainty and the impact of wet weather on dairy production, continued volatility in manufacturing activity is to be expected over the remainder of this year," Mr Smith said.
He noted several tailwinds for the sector, with an improving global outlook and large local pipeline of construction sector work and recent falls in the strength of the New Zealand dollar, which if sustained, would also improve prospects for manufacturing exporters.
Westpac senior economist Michael Gordon said while there were strong gains in meat and dairy volumes and other food and beverages, there were declines in most of the non-food categories, including a reversal of the sharp jump in transport and machinery which had boosted the March quarter.
Yesterday's manufacturing survey was the last major component for June quarter GDP, which will be released on September 21. "We'll finalise our forecast in our GDP preview bulletin next Thursday. "But as it stands, the risks look balanced around our forecast of 0.8 per cent growth," Mr Gordon said.