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Growth in the manufacturing sector picked up in October, helped by a weaker foreign exchange rate and as businesses built up stock ahead of Christmas, a survey showed today.
The seasonally adjusted Business NZ Performance of Manufacturing Index (PMI) rose to 56.9 last month, up 1.8 percentage points from September.
A figure over 50 indicates manufacturing is expanding, while under 50 indicates contraction.
"Various firms have found demand to be steady and are building up their stock levels for Christmas," Business NZ chief executive Phil O'Reilly said in a statement.
He said the New Zealand dollar's drop against the Australian dollar, the currency of New Zealand's biggest trading partner, was also aiding exports.
"Given that our closest economic neighbours are often the first port of call for those looking to export, the continued drop of the New Zealand dollar against the Australian dollar may improve export opportunities across the Tasman in the months ahead," O'Reilly said.
The New Zealand dollar fell 3.2 per cent against the Aussie dollar in October on expectations of higher Australian interest rates, although it rose 2.6 per cent versus the US dollar.
A fall in the currency makes New Zealand's exports more competitive on world markets, but it also raises the price of imported raw materials.
All five of the PMI's sub-indices showed an expansion in activity, with deliveries leading the gain with 59.7.
- REUTERS
