Meat, dairy influence manufacturing

Manufacturing volumes for the quarter to March rose a modest 0.5%, with softening underlined by the value of meat and dairy products being down 1.4%.

The latest total manufacturing sales volumes rose for the third consecutive quarter, Statistics New Zealand (SNZ) data said yesterday.

The previous quarter's larger 5.4% gain was been driven by a post-drought catch-up by the dairy sector.

Westpac economist Michael Gordon said manufacturing sales volumes ''rose modestly'' at 0.5%, while a rise in inventory levels showed production had risen at a faster pace.

''However, we're wary that most of the growth in the quarter came from an 8% jump in the petroleum and chemical sectors, another area where volumes are measured separately for GDP purposes,'' he said in a statement yesterday.

Mr Gordon said aside from uncertainty about measurement of manufacturing activity, he expected gross domestic product growth for the quarter to March was ''likely to come in higher'', than Westpac's initial forecast of 1.1%.

SNZ business indicators manager Neil Kelly said meat and dairy product manufacturing was up just 0.1%, following a large rise in the December 2013 quarter.

''This quarter's rise occurred despite a relatively flat quarter for meat and dairy product manufacturing,'' he said.

 

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