20 Jun 2011

Signs economy strengthening

8:22 pm on 20 June 2011

There are more signs the New Zealand economy is gradually getting on a stronger footing.

New figures from Statistics New Zealand show a continued pick-up in manufacturing and sales by wholesalers and improving prospects for services' firms.

Statistics New Zealand says manufacturers produced 1.9% more in the first three months of the year. That followed a 3.7% increase in the preceding three months. The increases came after a 10-year low in manufacturers' production at the end of the September quarter.

Rises in transport equipment, chemical, wood and paper products offset falls in printing, fuel and coal manufacturing.

Economists optimistic

The New Zealand Institute of Economic Research's latest consensus of economists forecasts shows they expect the economy to have grown by 1.1% in the year ending March, and by 2% in 2012.

Economists expect the rebuilding of Christchurch will lift economic growth to 4% in 2013.

NZIER deputy chief executive John Ballingall says the economic recovery is broadening.

Mixed results in service sector

The BNZ Business New Zealand Performance of Services Index rose slightly, by 0.2 points, to 52.8 in May compared with April. A reading above 50 indicates the service sector is generally expanding.

It was the fourth consecutive month prospects for services firms had improved. New orders, employment and sales all rose during the month.

Health and community services, property and business services and wholesalers showed the biggest improvement. But retailers, cafes and accommodation providers say their business went backwards in May.