19 Jan 2018

Election uncertainty slowed manufacturing growth - BNZ

2:49 pm on 19 January 2018

Activity in the manufacturing sector has slowed down.

Q-West Boat Builders welding fabricator Grant Loveridge works on a new ferry for the Auckland market.

Q-West Boat Builders welding fabricator Grant Loveridge works on a new ferry for the Auckland market. Photo: RNZ / Robin Martin

The BNZ-Business New Zealand Performance of Manufacturing Index fell 6.5 points to 51.2 in December, when compared with the month before, the lowest rate of growth in five years.

A reading over 50 indicates expansion.

All sub indexes fell in the month, including production, new orders and employment.

BNZ head of research Stephen Toplis said election uncertainty was to blame.

"Anecdotal evidence, across the economy, suggests there was a post-election hiccup in activity as businesses put off major spending, investment and hiring decisions until there was greater clarity and, more importantly, understanding of likely policy shifts," he said.

Business NZ executive director for manufacturing Catherine Beard said the results were disappointing.

"Overall, we'll be looking to the January result to see if the sector gets back into the level of expansion its been accustomed to in recent times," she said.