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Metal fabrication - Source: ONE News
Manufacturing is showing slow but steady improvement, remaining in positive territory for February, according to the BNZ - Business NZ Performance of Manufacturing Index.
The seasonally adjusted PMI for February stood at 53.3, up 1.2 points from January, with ongoing strength in new orders.
Metal product manufacturing showed the strongest increase of 54.9 points, and employment in the sector also grew.
Business NZ's executive director for manufacturing Catherine Beard says while New Zealand manufacturers are still making more cautious comments than positive in the survey feedback, the continued increase in new order numbers is encouraging.
She says all the diffusion indices, including employment, are now in positive territory.
"After six months of solid, if not spectacular expansion, we have now reached a phase where monthly results are consistent, and new orders continue to drive activity, which we would hope will flow through to increasing employment if the trend continues," says Beard.
Regionally, Canterbury was the only area to grow, with an increase of 9.5 points ahead of January. All the other regions declined.
BNZ head of research Stephen Toplis says the latest data supports the bank's belief that the broader economic environment is improving.
"The future is looking brighter for manufacturers' supply into the domestic market. At face value, household spending seems like one of the weaker links, but we believe it's on a slow trend improvement as stock-to-sales ratios continue to decline.
"Residential construction is also on the improve, largely driven by strong net migration inflows. However there is no evidence that non-residential will follow suit."
Toplis says the really positive news is in the export sector, with dairy, wood and fuel exporters doing particularly well.
