Dairy and meat underpin manufacturing sector

New Zealand's struggling manufacturing sector received a welcome boost during the three months ending September but only from the increased sales of dairy and meat products.

Statistics New Zealand's quarterly survey of manufacturing showed total manufacturing sales volumes rising 2.6% in the September quarter, up from a 0.5% rise in the June quarter.

The survey details were consistent with most forecasts of weak growth in the September quarter gross domestic product (GDP).

The quarter was dominated by a 20% rise in meat and dairy sales. There was a 32% rise in dairy export volumes and 15% for meat exports.

Westpac senior economist Michael Gordon said much of the increased volumes in meat and dairy reflected a running down of inventories built up in the previous quarter.

''The exact impact on GDP can't be determined from this survey. For GDP purposes, meat and dairy volumes are surveyed directly whereas the manufacturing survey records sales values and applies a deflator."

He expected the final growth contribution would be more modest, but positive.

Excluding meat and dairy, sales were down 1.4%.

There appeared to be an element of stock accumulation in the future so the impact on production GDP might turn out to be less negative, Mr Gordon said.

There was a 3% drop in sales of wood products, a 7% drop in metal products - probably from cuts at Tiwai Point - and a 2% drop in capital equipment. The latter, in particular, was consistent with the growth ''pothole'' in the third quarter that was evident in a broad range of indicators. Those same indicators to date had been more positive for the fourth quarter, Mr Gordon said.