Manufacturing activity still growing

By ELLEN READ

Manufacturing activity slowed in New Zealand last month but levels are still expansionary and higher than at the same time last year.

While the latest ANZ-Business NZ Performance of Manufacturing Index dropped to 57.5 in July from June's 62.2, the index is 5.9 points higher than July last year.

Any index level above 50 points indicates the sector is expanding.

All five sub-indexes (new orders, production, employment, deliveries and finished stocks) expanded during the month, again led by new orders, which, at 61.6, was the only index to record a value over 60.

The metal product sector showed the highest level of expansion following a strong pick up in new orders from overseas. Seasonal patterns meant the textiles, clothing, footwear and leather sector recorded a decline.

Some firms reached production capacity in July, while others had been planning ahead for the timing of new contracts to avoid any over-commitment. Labour shortages and exchange rates played a minor role in influences affecting activity for July, according to the index.

Three of the four regions showed expansion last month. The Canterbury/Westland region led the way, closely followed by the Northern region. The Central region recorded moderate expansion, while the Otago/Southland region experienced a decline.