NZ manufacturing activity slows to a 5-month low in October

NZ manufacturing activity slows to a 5-month low in October

By Tina Morrison

Nov. 12 (BusinessDesk) - New Zealand manufacturing activity weakened in October to the lowest level in five months in what may be a temporary blip.

The BNZ-BusinessNZ performance of manufacturing index fell to a seasonally adjusted 53.3 last month, from 55 in September, marking the lowest level since May. A reading of 50 separates expansion from contraction.

The manufacturing sector has been expanding since October 2012. The latest monthly reading shows that while four of the five sub-sectors of the index declined, all but finished stocks remain in expansion.

"The manufacturing sector grew in October, but at a slightly slower pace than in September. The trend remains robust," Bank of New Zealand senior economist Doug Steel said in his report. "The slowdown in October may prove temporary. We say this noting that there was a drawdown of inventory in the month which, combined with still above-average new orders, is a positive indicator for production ahead."

The PMI showed the measure of new orders declined to 55.9 from 57.4 in September, production fell to 53.1 from 57.5 , deliveries slipped to 52.5 from 55.2, and finished stocks dropped to 49.2 from 52.4. Meanwhile, employment advanced to 52.4 from 51.1.

The proportion of positive comments increased to 61.8 percent in October from 58.7 percent in September, with many citing increased offshore orders and new customers.

(BusinessDesk)

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