A gauge of manufacturing activity continues to point to expansion in the sector. The BNZ-Business New Zealand performance of manufacturing index (PMI) stood at 57.5 last month.

While it is down two points on July, that had been a nine-year high for the indicator. Any level above 50 indicates the sector is expanding.

BNZ economist Doug Steel said the PMI results for July and August boded well for a bounce in manufacturing, following the disappointing June quarter economic survey of manufacturing Statistics New Zealand released this week.

"It suggests the trend in manufacturing activity remains positive following a tough second quarter when a decline in food processing on account of the drought coincided with what looks like a pause in an otherwise strong construction upswing," Steel said.


Business New Zealand executive director for manufacturing Catherine Beard said a healthy 57 per cent of the comments provided were positive, although that was down on a stellar 67 per cent in July.

"At a domestic level, many of those involved in the building and construction sectors are seeing strong demand for their products, but equally various offshore customers are providing a steady stream of orders for New Zealand goods," she said.