The manufacturing sector has expanded for the ninth month running, but it was at a slower pace than in previous months.
The seasonally adjusted PMI for May was 54.5 in May, down 4.1 points from April and in keeping with international indexes.
A PMI reading above 50.0 indicates that manufacturingis generally expanding, blow 50 that it is declining.
The May result was the fourth consecutive month that all the main indices were in expansionary mode, apart from employment, which contracted slightly last month.
Business New Zealand executive director for manufacturing Catherine Beard said the market appeared to have turned a corner.
"The expansion in the sector seems to be steady and solid and we are in a much better place than we were one year ago."
However comments from manufacturers showed that were not all "out of the woods" yet, she said.
BNZ senior economist Craig Ebert said the bumpy road to recovery was as expected.
Overall, manufacturing sales volumes dipped 2.7 per cent. However this reflected a 10 per cent drop in agricultural produces, with the rest of manufacturing expanding real sales by 2.7 per cent.
Unadjusted results by region showed all were in expansion during May, apart from Northland (48.3).
Leading the regions was Otago/Southland (58.5), followed by Canterbury (57.6), and the Central region (52.3).
