KEY POINTS:
The manufacturing sector continues to expand with the most consistent level of positive activity since late 2004, the latest Business NZ survey says.
The Performance of Manufacturing Index for December was a seasonally adjusted 54.2 - down 0.9 points on the previous month but still above 50, which indicated expansion.
Business NZ chief executive Phil O'Reilly said the result showed manufacturers were learning to live with the high exchange rate.
"The dollar being so high for so long has caused them to learn to live with it and to reorganise their business and to either abandon or take on markets or products where they can survive," O'Reilly said.
All five main indexes showed expansion for the third month in a row - the first time this had happened since late 2004/early 2005. Production was down from 58.5 in November at 55.9, while new orders came in at 56.4, deliveries of raw materials 54.1, finished stocks were 53.9 and employment was 50.8.
High growth without a corresponding high demand on labour suggested that manufacturers were increasing productivity, O'Reilly said. "That's a fantastic story because that's really more than anything else what we need to maintain - that competitiveness even against a high dollar."
Confidence in December fell back to historical levels with an equal split on positive and negative comments from manufacturers, down from a 57.1 per cent positive result in November.
But the anecdotal feedback was that it had been a positive start to the year, O'Reilly said.
