'Tale of two markets' is a cheery read for exporters

The strongest performance for manufacturing in June was in the petroleum, coal and chemicals sector. Picture / Dean Purcell

The falling dollar is boosting business for export manufacturers, Business NZ's Performance of Manufacturing Index shows.

Business NZ chief executive Phil O'Reilly said the latest PMI, released yesterday, showed a "tale of two markets" emerging with the domestic economy slowly softening but activity in the export market picking up.

He said domestic and export manufacturers were squeezed by increased labour and oil costs.

June's seasonally adjusted PMI was 52.1, down 6.2 points on May, but continuing the series of positive results over the past five months.

A PMI reading above 50 indicates manufacturing is generally expanding, below 50 that it is declining.

The strongest expansion for the month was shown in the petroleum, coal, chemical and associated product sector (60.4), followed by the food, beverage and tobacco sector (56.2).

"Manufacturing, even in the domestic economy, is not in the doldrums," said O'Reilly. "By no means is it a disastrous story because you are also seeing that new orders are very strong."

After rising above US74c early last year, the kiwi has dropped sharply, closing at US61.80c last night.