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Auckland region's manufacturers holding on

Auckland region's manufacturers holding on

Manufacturers in the Auckland region are finding the route to ongoing expansion tougher than their counterparts further south.

Their ANZ/Business NZ Performance of Manufacturing Index (PMI) for manufacturers in the north barely scraped into positive territory on the back of rising stockpiles of raw materials and finished goods whereas those to south are showing modest growth.

The June PMI for New Zealand overall was 53.2 up from 49.6 in May but for the largest manufacturing base in the Auckland region the PMI moved from 47.9 in May to just 50.2 in June. (A PMI reading above 50 indicates expansion while below 50 indicate contraction.)

"Manufacturers in the north are blaming a fall off in domestic demand for their indifferent showing," said Bruce Goldsworthy, the Employers & Manufacturers Association's Manager of Manufacturing Services.

"Traditionally Auckland's manufacturers service the domestic market to a higher degree than further south.

"But in spite of the ongoing surge in building, the word is that the market is quieter with both retail and industrial customers spending less.

"The strong New Zealand dollar, especially the cross rate with Australia, is contributing substantially to the slow down.

"The lower dairy pay out and seasonal factors are also delivering flow on effects.

"Stocks of raw materials are high (59.8) relative to production levels (45.7) though new orders (48.9) are up two points on the previous month."

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