Activity slower during August

Manufacturing nationally has returned a flat result for August, with Otago and Southland dipping, following four months of positive gains.

August saw the national manufacturing sector remain flat for the second consecutive month following steady expansion in the first half of the year, according to the BNZ-Business New Zealand performance of manufacturing index released yesterday.

Readings above 50 indicate expansion and below 50 a decline.

Nationally, overall activity fell 1 point to 49.3 in August, while regionally the unadjusted activity was mixed, with a lift in the Northern and Canterbury-Westland regions and contraction in Central and Otago-Southland regions.

Chief executive of the Otago Southland Employers Association, John Scandrett, said the Otago Southland index reading slipped 3.6 points from July. down to 44.7 for August.

"The local region is, unfortunately, now seeing some contraction in the manufacturing sector.

"While we were tracking positively through the March to June period and expansionary outcomes then indicated we might be starting to come through the economic turbulence widely seen in the region, this result has signalled we have not yet fully shaken off the impact of the economic slow-down," he said.

The August data revealed a slowing in export ordering in the textile and clothing field, and evidence of "sluggish consumer demand" across machinery and equipment and wood and paper sectors, Mr Scandrett said.

The result was "disappointing", in that Otago-Southland had, for several months, led the country in results and Mr Scandrett hoped the shift was a "slight adjustment", as opposed to a "significant trend shift".

BNZ economist Doug Steel said the results pointed to a sector that was jogging on the spot, rather than pushing forward.

"As concerning as the mediocre level is the rather brisk slide from a solid 55.1 average in the first half of the year. The drying up of new orders in July and August is especially concerning," Mr Steel said in a statement.