Manufacturing confidence soared last month - the latest in a string of indicators suggesting the economy is picking up speed.
A net 40 per cent of manufacturers in the latest Canterbury Manufacturers' Association survey said they were confident in November, a turnaround from a negative 7 per centin October and the highest result since June 2004.
At the same time the performance index (a combination of profitability and cash flow) was above 100 for the first time this year, at 101 - up from 93 last month. A result above 100 shows expansion.
The survey was the latest in a line of positive indicators. It follows a 15-month high in consumer confidence, strong real estate and retail sales - all in spite of a rebounding exchange rate and high interest rates.
The official cash rate stands at 7.25 per cent, compared with benchmark rates of 5 per cent in Britain, 5.25 per cent in the United States and 6.25 per cent in Australia.
Canterbury Manufacturers' Association chief executive John Walley said both domestic and export sales had risen.
"The hope is that these strong sales figures continue into next year," he said. "The signs are there and many firms have said that their forward orders are strong."
However, the continued strength of the dollar against the US and Australian dollars would dent margins for most exporters, he added.
"Buoyant consumer spending [and] inflation pushing interest rates could see the NZ dollar over and above US70c and that is a worry.
"If the dollar hangs above that rate, the shine will quickly fade on any export-led improvement in the trade numbers."
The survey's forecast index (based on investment, sales, profitability and staff) was also up from 101 last month to 108 - the fourth month in a row at or above the expansion threshold.
Total sales in November were up more than 28 per cent on last year.
