South's manufacturing performance leads New Zealand

Otago-Southland manufacturers led the country in activity last month (November) according to the latest BNZ-Business NZ performance in manufacturing index.

Otago-Southland Employers Association chief executive John Scandrett said there were several positive elements across the indices that he thought provided early signals of a pending improvement in the local manufacturing sector.

"It seems that we were right in that the November result, at 66 points, leads the national readings and returns Otago and Southland to the strong comparative position we held through the mid-year months.

"It's a robust result in what is still, in many areas, a variable market place," he said.

The national seasonally-adjusted index was 52.7 points in November where a result above 50 is expansionary and below 50 is contracting.

The northern region index reading was 61.5, central was 60.6 and Canterbury-Westland was 61 - up 11.5 points as the region rebounded from the September earthquake.

Business NZ's director for manufacturing Catherine Beard said that although the national expansion was modest, it was solid across all the regions and indices measured.

"Having new orders in expansion, albeit modest expansion, is a good forward indicator of continuing growth."

Those making positive comments in the survey again seemed to be those that were focused on exporting to the Australian market or had some seasonal things going their way, she said.

BNZ senior economist Craig Ebert said the latest PMI, readings from other business surveys and export statistics called into question the degree of a slump in manufacturing output that had been suggested by the third-quarter manufacturing sales and inventory statistics.

"Statistics NZ will, of course, be publishing its verdict on manufacturing production in next Thursday's third quarter GDP. It promises to be the winger on the overall result with the rest of the GDP components, as a whole, offering no clear directional signal," he said.