10 Apr 2014

Manufacturing sector accelerates

1:54 pm on 10 April 2014

The pace of activity in the manufacturing sector has accelerated.

The latest BNZ-Business New Zealand performance of manufacturing index was 58.4 in March, its highest level since July last year.

It's also the 19th successive month of expansion.

A reading above 50 indicates expansion.

The gains were led by production and new orders, while employment is at its highest level in more than six years.

BNZ economists say domestic demand is strong, led by rebuilding efforts in Christchurch, and high commodity prices, which is fuelling farm construction work.

That's offsetting the effects of a high dollar on export returns.

An analysis of March traffic flows also indicates the economy continues to grow strongly.

ANZ Bank's Truckometer measures traffic flows on certain roads and calculates the economic impact.

The heavy traffic index, which is an indicator of the economy right now, fell 1.1 percent last month, after a particularly strong February.

The light traffic index, which predicts growth 6 months ahead, rose 1.1 percent.

ANZ economist Sharon Zollner said both indices rose strongly over the March quarter, indicating the economy will enjoy solid growth well into the middle of the year.