11 May 2012

Dollar may bolster manufacturing sector - economist

9:06 am on 11 May 2012

An economist says a lower New Zealand dollar may bolster a sluggish manufacturing sector.

The BNZ-Business New Zealand Performance of Manufacturing index fell 5.8 points in April from March, to 48 points, and is at its lowest level since November last year. A reading above 50 shows expansion.

Three of the five main indicators fell, including production, new orders and deliveries while employment and finished stocks expanded.

BNZ economist Doug Steel says the recent declines in the New Zealand dollar may boost sales and returns to exporters, especially those selling goods to Australia.

He says the mixed response from respondents to the survey shows that performance depends on what is being manufactured and where it is being sold.

Mr Steel says soft demand for products and the situation in Europe are weighing on the sector at the moment.