New Zealand manufacturing sales activity rose in the third quarter, reflecting a rebound in petroleum and coal products, meat and dairy and chemicals.

The volumes of total manufacturing sales rose 2.1 per cent, seasonally adjusted in the September quarter, after a revised 2.2 per cent gain three months earlier, Statistics New Zealand said. The value of manufacturing sales rose 0.4 per cent, following a 1.8 per cent gain three months earlier. Excluding meat and dairy product manufacturing, sales rose 2.3 per cent in the latest quarter.

New Zealand's manufacturing sector has almost been in continuous expansion since October 2012, based on the Bank of New Zealand-BusinessNZ performance of manufacturing index. Over the longer-term, manufacturing has declined as a percentage of the economy, from about 26 per cent of gross domestic product 40 years ago to about 13 per cent in 2009, with a rise in services, now the biggest contributor to GDP. Still, more recently the trend for manufacturing sales volumes has been up since reaching a low point in 2013.

"The trend in manufacturing product sales remains fairly robust across most categories," said Jane Turner, senior economist at ASB Bank.


Turner said the figures reinforce ASB's prediction of a 1 per cent increase in ex-primary manufacturing volumes in its gross domestic product component forecast. ASB is currently expecting a 0.8 per cent gain in GDP in the third quarter but will finalise its forecast after the release of third-quarter building work put in place data.

Of the 13 manufacturing industries measured, 10 rose and three fell in the latest quarter. Petroleum and coal product manufacturing sales volumes, which are volatile and aren't seasonally adjusted, rose 8.1 per cent, following a 9.5 per cent decline in the second quarter. Meat and dairy manufacturing rose 1.6 per cent and chemical, polymer and rubber products rose 5.5 per cent.

Petroleum and coal product manufacturing also led the gain in the value of manufacturing sales, rising 11 per cent in the latest quarter, while meat and dairy fell 2.3 per cent and chemicals gained 5 per cent.

The volume of finished goods stocks, which isn't seasonally adjusted, rose 5.1 per cent from the same quarter of 2015, mainly due to an increase in meat and dairy products.