South's industry stability returns

Signs of stability were returning to manufacturing in Otago and Southland, Otago-Southland Employers Association chief executive John Scandrett said yesterday.

The February BNZ-Business New Zealand performance in manufacturing index (PMI) showed Otago-Southland at 49.5 in February, remaining in a stable band when compared with the January and December figures.

The regional PMI was 44.5 at the corresponding time last year.

"We're still holding a relatively strong position against two of the other three regions which in February reported readings marginally under ours."

The exception was Canterbury-Westland where the PMI hit a spike of 52.9, he said.

A reading of above 50 indicates manufacturing is expanding and below 50 indicates contraction.

Mr Scandrett said it was a good sign to see the stability come through in the results, but there had been some negative comments associated with the February results.

Examples included "erratic seasonal demand" from food producers, "recessionary factors still evident" from printing and publishing and "very quiet" from machinery and equipment industry parties.

Nationally, the PMI was 53.3, compared to 39.3 in February last year.

Business NZ said while New Zealand manufacturers were still making more cautious comments than positive in the survey feedback, the continued increase in new order numbers was encouraging. It was also positive that all the diffusion indices, including employment, were now in positive territory.

"After six months of solid, if not spectacular expansion, we have now reached a phase where monthly results are consistent, and new orders continue to drive activity, which we would hope will flow through to increasing employment if the trend continues," a Business NZ spokeswoman said.