Manufacturing dips after good start to year

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The volume of manufacturing sales fell 0.7 per cent in the June 2011 quarter, after a 1.4 per cent rise in the March 2011 quarter, Statistics New Zealand said today.

"The trend for manufacturing sales volume, which gives a longer-term picture of movements, has been fluctuating for several years and is now 7.6 per cent below the September 2007 quarter peak," industry and labour statistics manager Kathy Connolly said.

Decreases in the seasonally adjusted sales volumes were recorded in the June 2011 quarter for nine of 13 industries, with four increasing.

The main contributors to the fall in the volume of manufacturing were:

• chemical, polymer, and rubber product manufacturing down 5.4 per cent.

• meat and dairy product manufacturing down 1.2 per cent.

• petroleum and coal product manufacturing down 2.6 per cent.

Partly offsetting these falls in sales volume were a 3.1 per cent rise in the beverage and tobacco product industry and a 5.9 per cent rise in the printing industry.

Rising prices in most manufacturing industries have led to the value of sales rising 2.1 per cent in the June 2011 quarter.

The main contributions to this increase came from two industries:

• meat and dairy product manufacturing up 4.9 per cent.

• petroleum and coal product manufacturing up 7.6 per cent.

Statistics NZ said these two industries also contributed strongly to the 14 per cent increase in the trend for total sales value since the September 2009 quarter low-point.

ANZ economist Mark Smith said the data was weaker than market expectations and the test now would be how well the manufacturing sector and the economy in general navigated an increasingly turbulent global scene.

"The still high New Zealand dollar, fickle global economy, and declines in overseas manufacturing surveys suggest a number of challenges ahead for manufacturing exporters," he said.

-NZ HERALD ONLINE