15 Sep 2017

Manufacturing bounces back after winter slump

3:19 pm on 15 September 2017

New Zealand's manufacturing activity has bounced back from a mid-winter dip in August on the back of a lift in production and new orders.

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 BusinessNZ Performance of Manufacturing Index (PMI) rose to 57.9 from 55.5 in July.

A reading over 50 shows the sector in expansion - and the index has been above that level continuously since 2012.

All five sub-indices were in expansion with finished stocks the only one to ease, while employment and deliveries were steady.

BNZ senior economist Craig Ebert said the sector was looking buoyant despite political uncertainty.

"We haven't really seen any sign of nerves in terms of activity or confidence ... so there seems to have been a lot of momentum in the economy going into the election."

He said the PMI, taken along with consumer and business confidence surveys, suggested the economy growing comfortably between 2.5 and 3 percent a year, and possibly higher.

Second quarter economic growth data is due next week with expectations for a rise of about 0.8 percent for the three months ended June - with an annual rate of 2.7 percent.

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