Manufacturing down for quarter

Christina Leung.
Christina Leung.
Manufacturing took a hit in the quarter to June. Meat and dairying returns were down 5.7%, or $485 million.

Overall, manufacturing values were down 1.9%, or by $481 million, and volumes were down 0.7%.

Seven out of 12 industries recorded volume declines, according to data released by Statistics New Zealand (SNZ) yesterday.

SNZ business indicators manager Neil Kelly said results were mixed across all industries, but led down by the 1.4% fall in meat and dairy product manufacturing.

''Meat and dairy manufacturing sales have edged down in the last two quarters, following a large rise in the December 2013 quarter,'' he said.

The main industry movements were in chemical, polymer, and rubber product manufacturing, which were down 3% in volume, or 4.4% in value, by $101 million.

Petroleum and coal product manufacturing by volume was the biggest gainer, up 2.4%.

ASB economist Christina Leung said SNZ's economic survey of manufacturing was a key indicator for ex-primary manufacturing in gross domestic product (GDP) which will be released on Thursday next week.

''Today's survey points to a slight increase in ex-primary manufacturing production volumes over the second quarter,'' she said.

The data was in line with expectations, given manufacturing confidence surveys had pointed to a moderation in manufacturing activity in recent months.

The ASB's preliminary second quarter GDP forecast remained up 0.6%, quarter on quarter, she said.

Westpac senior economist Michael Gordon said the figures presented no risk to Westpac's forecast of 0.7% growth in June quarter GDP.

''They fit with the general story that the New Zealand economy slowed modestly in the second quarter, compared to the run of strong growth in the previous three quarters,'' he said.

Total manufacturing sales fell by 0.7% in the second quarter, leaving them up 5.8% on a year ago.

''Adjusting for changes in stocks over the quarter indicates that production - the relevant concept for GDP - was slightly stronger than the sales figures suggest,'' Mr Gordon said.

SNZ's Mr Kelly said the trend for the total manufacturing sales volume, which gave a longer-term picture of movements, had flattened after recent rises.

simon.hartley@odt.co.nz

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