15 Feb 2013

Manufacturing sector expands in January

7:37 am on 15 February 2013

Activity in the manufacturing sector has experienced its biggest January expansion in six years, bolstered by a healthy lift in new orders.

The BNZ-Business New Zealand Performance of Manufacturing Index shows activity in the manufacturing sector rose 4.8 points to 55.2 last month. A reading above 50 indicates the sector is expanding.

Business New Zealand executive director of manufacturing Catherine Beard says its employment index has been in contraction for eight consecutive months.

She says employment has been lagging which may be partly to do with confidence, because manufacturing orders need to be consistently improving before employers are keen to increase staff numbers.

Ms Beard says manufacturing is also becoming much more high tech in terms of things like investment, machinery, equipment and robotics which is replacing jobs to some extent.

She says the sector will be focussing on what's happening in Australia which has helped New Zealand manufacturing to hold up through some pretty tough times.

Ms Beard says Australia is New Zealand's biggest export market and there has been a good exchange rate differential between the two countries.

She says the food and beverage sector is performing really strongly.

Ms Beard says there is always some patchiness with some sectors performing better than others.

She says a lot of manufacturing in New Zealand is connected to the building and construction sector and there are some good results coming out of Canterbury and that seems to be flowing through into the supply chains.