New Zealand's manufacturing sector recorded its highest level of activity in almost two years and a record for the month of, led by metal production and machinery.
The BNZ-BusinessNZ Performance of Services Index rose 6.9 points to 57.7 in February from a month earlier, with four of the five ofthe sub-indexes expanding. The expansion was led by new orders rising to 63.1 and production on 61.9, both at their highest level since 2004. Deliveries increased to 3.8 points to 54, the highest since August 2011.
Employment was little changed on 51.3 as was finished stocks on 49. A reading of 50 separates a contraction from an expansion.
"We think a production bounce back has occurred in the first quarter of 2012," said Doug Steel, economist at Bank of New Zealand, describing the February reading as a "stunning" result.
"The PMI has only printed better that today on two occasions in the past seven years - it is one out of the box," Steel said. "We are already seeing signs of a construction pick up in the leading indicators."
"We are more convinced the manufacturing trend is now positive, even though the quarter to quarter movements are as bumpy as ever," he said.
In the manufacturing industry sub-groups metal production improved significantly, reaching its highest value for the month on 59.7. Machinery and equipment manufacturing increased to 56.6, while food, beverage and tobacco showed moderate growth on 53.3.
Petroleum, coal, chemical and associated products reversed its decline from last month on 52.4.
In the regions, unadjusted results showed that activity bounced back strongly in the North Island but slipped in the deep South. The Northern region rose 10 points to 53 from January. The Central region increased 15.5 points to 61.4, its highest level since November 2007.
Canterbury/Westland showed little-change on 52 and Otago/Southern slipped to 44.7 its lowest value since June 2011.
