KEY POINTS:
Manufacturing expanded further in August, a survey showed today, as a weaker currency improved the outlook for exports.
The seasonally adjusted Business NZ Performance of Manufacturing Index (PMI) rose to 55.7 last month, a three-month high, from 54.8 in July.
A figure over 50 indicates manufacturing is expanding, while under 50 indicates contraction.
"Both production and new orders have continued to show strong growth, which have been the contributing factors towards boosting expansion," said Business NZ chief executive Phil O'Reilly in a statement.
"While the New Zealand dollar has eased over recent weeks, ongoing decreases would provide further boosts for competitiveness," he said.
All five of the PMI's sub-indices expanded, with production and new orders showing the largest rises, but there was a slight easing in growth in finished products.
Earlier today, the Reserve Bank left interest rates unchanged at 8.25 per cent, after raising them in the previous four reviews by a total of 100 basis points.
The New Zealand dollar hit 22-year post-float highs in late July, but has since fallen around 12 per cent to around US71c following the turmoil in credit markets which has prompted investors to exit risky assets, such as carry trades in high-yielding currencies.
A fall in the currency makes exports more competitive on world markets, but it also raises the price of imported raw materials.
All 17 economists in a Reuters poll expect the central bank to keep interest rates at current levels at least until the second quarter of next year.
- REUTERS
