New Zealand's manufacturing activity continued to gain in August, pushing further above long-term average as activity in South Island and larger firms picked up.

The BusinessNZ-Bank of New Zealand performance of manufacturing index rose 2.4 points to a seasonally adjusted 57.9 in August, extending its run of expansionary readings above 50 in every month since October 2012.

BNZ senior economist Craig Ebert said growth was "relatively rapid now" as the latest month's data pushed the index ahead of its long term average of 53.3.

"Underlying this, the regional impetus has become much more uniform, after the South Island was lagging the North at the same stage last year," Ebert said.


"Similarly, medium-to-large sized firms have gone from slow to go-go over the last 12 months, while firms of lesser size have held to a steady growth pulse."

Three of the five sub-indices rose, with production up 4.1 points to 60.3 and new orders gaining 2.9 points to 58.4. Employment added 0.2 points to 56.7, which Ebert said were "fairly booming results" compared to its average of 50.6.

"This index has proved to be a good pointer to official measures of employment, in particular the filled-jobs series of the quarterly employment survey," he said.

"This, for the manufacturing sector, registered annual growth of 2 per cent in Q2 2017 having run soft over calendar 2016. The PMI jobs index also offers general support to the idea that the fall we saw in the household labour force survey's measure of total employment in Q2 was largely a technical issue, rather than a 'real' one."

Finished stocks dropped 3.1 points to 52.8, and deliveries dipped 0.4 points to 56.

Ebert said the local PMI is a standout on the international stage, but manufacturing activity around the world is picking up "after a relatively slow and disjointed 2016".

Neighbouring Australia's economy is showing a firmer path for non-mining investment, which is typically good for manufacturing industries, he said.