Otago-Southland maintains lead in national manufacturing data

Otago and Southland's manufacturing sector slipped off its pace at the end of 2012, but still led national data from four regions.

For 2012, the average for the BNZ-Business New Zealand performance of manufacturing index stood at 50.9, reflecting a flat year, barely nudging at expansion, and with only slightly better expectations for 2013.

Points above 50 on the index reflect expansion, and below that contraction.

Nationally, the index barely changed for December and sits on the fence at 50.1 points. Northern and central North Island were in contraction at 48.4 and 46.3 respectively, while Canterbury-Westland and Otago- Southland remained in expansion, at 53.4 and 60 respectively.

Otago Southland Employers' Association chief executive, John Scandrett, said it was positive to see the Otago-Southland at 60 points, in the face of ''a good deal of recent negative comment on the general state of the manufacturing sector''.

''While we did slip slightly off the November 65-point reading, the continuing expansion-based results are satisfying. Particularly so, since the December outcome again has us leading the national results,'' Mr Scandrett said.

BusinessNZ's executive director for manufacturing, Catherine Beard, said five of the 2012 months were in contraction, and only February and May showed sufficient levels of expansion. However, comments by manufacturers remain more positive than negative, and New Zealand remains well ahead of Australian manufacturing, which had a total 10 months of contraction last year.

For Otago-Southland, the sub-indices for December of production, employment, deliveries and finished stocks were all ''strongly in expansionary mode'', Mr Scandrett said.

''While elements of these would have been connected to Christmas demand expectation, they are also, hopefully, indicative pointers on what manufacturers see as post-Christmas market strength,'' Mr Scandrett said.

Some machinery and equipment activities fell short of industry expectation, and again in the packaging sector, there was a reflection of the lack of strength in the Australian market for local operators.

Ms Beard said 2013 would most likely present similar challenges for many manufacturers, although expectations of global economic growth and momentum from Christchurch's rebuilding ''should assist in driving up demand for products''.

- simon.hartley@odt.co.nz