NZ manufacturing growth slows for a third month

New Zealand manufacturing growth slowed for a third month in August as global economic growth faltered, the U.S. had its credit rating cut and Europe's sovereign debt crisis grabbed headlines again.

The BNZ-Business New Zealand performance of manufacturing index slipped 0.3 points to 52.9, remaining above the 50 level which indicates expansion.

Deliveries was the fastest growing component last month at 55.8, followed by new orders at 54.3, production at 53.7 and finished stocks at 52.3. The employment component fell to a contracting 49.2.

"August's PMI continues a remarkably steady run over recent months, but masks considerable and widening variation in the detail," BNZ economist Doug Steel said in his report. "While this variation reflects the many factors pushing and pulling the economy, it is encouraging to see the overall trend remain positive."

Steel said the steady level was encouraging given the "sharp deterioration in global growth prospects" in the month.

BNZ expects manufacturing to make a smaller contribution to economic growth in the second quarter data, and is picking 0.2% expansion in the three months through June 30.

Manufacturing has regularly been one of the strongest-performing industries in recent economic surveys, making up 12.5% of the gross domestic product in the three months ended March 31, and was the fastest growing sector at a quarterly pace of 3.6%.

The petroleum, coal, chemical and associated products sub-industry reported its third consecutive fall in activity to its lowest point since May 2009 at 38.2. Metal product manufacturing was the fastest expanding sub-industry at 59.6.

Otago/Southland was the fastest growing region at 61.8, followed by Canterbury/Westland at 57.2. Northern was 51.5 while central fell into contraction at 49.9.