New Zealand manufacturing expanded at its fastest pace for three years in April, bolstered by new orders.
The BNZ-BusinessNZ performance of manufacturing index rose 1.1 to 54.5 in April from March. That's its highest April level since 2010. A reading above 50 indicates expanding activity, while a reading below 50implies a contraction. The index has averaged 54.8 so far this year, suggesting healthy and consistent activity, BusinessNZ said.
"Results over the last four months provide a regular pattern of growth, which has been assisted by strong activity for new orders, both domestic and offshore," BusinessNZ's executive director for manufacturing, Catherine Beard, said in a statement.
The expansion was experienced in most parts of the country.
Three of the five seasonally-adjusted diffusion indices expanded in April, led by new orders at 59.4. Deliveries expanded for the seventh consecutive month at 55.7, while production rose to 55.3. Meanwhile, employment dropped to 48 and finished stocks declined to 47.8.
The most positive aspect of the latest measure is that new orders met with declining inventories, said Craig Ebert, a senior economist at Bank of New Zealand.
"This strongly suggests production will not only keep ramping up, but needs to in order to avoid emptying the shelves," Ebert said.
The expansion in New Zealand contrasts with a slide in Australia, with the two countries this year experiencing the two largest monthly differences in activity levels since the New Zealand measure began in 2002. In Australia, the April index was at 36.7, its lowest result since May 2009.
