The volume of New Zealand's total manufacturing sales fell in the fourth quarter of 2016 but the values rose due to higher prices.

The volumes of total manufacturing sales fell 1.8 per cent versus the prior quarter after a revised 1.5 per cent gain in the September quarter, Statistics New Zealand said. The value of manufacturing sales rose 0.8 per cent, following a revised 1.1 per cent gain three months earlier. Excluding meat and dairy product manufacturing, sales fell 0.6 per cent versus a 2 per cent gain in the September quarter.

"The fall in meat and dairy sales volumes followed rises in the previous two quarters," business indicators senior manager Neil Kelly said. "In contrast, sales values were up more than $350 million, mainly reflecting a sharp rise in dairy product prices," said Kelly.

New Zealand's manufacturing sector has been in almost continuous expansion since October 2012, based on the Bank of New Zealand-BusinessNZ performance of manufacturing index. However, over the longer-term, manufacturing has declined as a percentage of the economy, from about 26 per cent of gross domestic production 40 years ago to about 13 per cent in 2009, with a rise in services, now the biggest contributor to GDP.

More recently "the trend for the total manufacturing sales volume, which gives a longer-term picture of movements, has been mainly rising since mid-2013 but now appears to be easing," said Kelly.


Of the 13 manufacturing industries measured, six rose and seven fell in the latest quarter. Meat and dairy product manufacturing volumes fell 5.7 per cent while wood and paper product manufacturing fell 2 per cent and fruit, oil, cereal and other food manufacturing fell 1.7 per cent.

In terms of the value of manufacturing sales, meat and dairy product manufacturing rose 5.2 per cent while petroleum and coal product manufacturing rose 12 per cent.