Otago and Southland manufacturers have booked a positive
spike in activity for October, but the supply and demand
imbalance of goods remains precarious.
During the past three months, Otago Southland's manufacturing
sector has been a roller-coaster; from expansion, contraction
and back to expansion.
In the Business New Zealand performance of manufacturing
index for October released yesterday, Otago Southland leapt
4.2 points to 54.0 value points - its highest result since
The national index had a similar point gain to Otago
Southland, of 4.1, but that was only enough to propel it to
Historically, the national index makes for uninspiring
reading, as over the past quarter the index has averaged 48.8
in contraction, and for the year to date averaged 51.2; just
in expansion territory.
Otago Southland Employers Association chief executive John
Scandrett said the southern region felt a "bumpy ride" in
selected machinery and equipment activity levels and also saw
some slowdown in the packaging industry, especially within
the producer segment operating in Australia.
"Hopefully, these are just temporary lulls where supply and
demand imbalance is driving the currently sluggish trading
patterns," Mr Scandrett said.
The October survey sub-indices delivered "very strong"
results in production, finished stocks and deliveries
readings, but the new orders confidence took "a hit", now
sitting at only 36.1 points.
"I think we can confidently take from this that once again,
our manufacturers can pretty accurately read their forward
market conditions, and after this strong October spike, there
will perhaps be a slowing in demand," Mr Scandrett forecast.
Business New Zealand executive director for manufacturing
Catherine Beard said while any return to expansion was
obviously positive news, no-one should think this is the
immediate start of better times ahead for the sector.
"Looking at the history of the survey, we've just come out of
the longest consecutive period of contraction since 2009,"
she said in a statement yesterday.