The 3.1% improvement in manufacturing activity was a sharp rebound from the September quarter when it fell 1.7% to a nine-year low.
There was also some positive news yesterday from Paymark, the electronic sales transaction company, which revealed Otago was one of the leading regions behind a 3.4% increase in the value of spending transactions for February compared to the same month a year earlier.
The data showed regional New Zealand out-performed Auckland, Wellington and Christchurch, with those three centres recording a more modest 1.8% increase.
Otago recorded a 5.6% increase in the value of transactions for February, behind Gisborne (8.6%) and ahead of Waikato (4.6%).
Statistics New Zealand (SNZ) reported increased sales in 11 of the 15 manufacturing industries it monitors, with meat and dairy up 4.6%, other food up 5.8%, and structural, sheet and fabricated metal products up 7.9%.
The value of sales rose 0.7% or $139 million, a welcomed turnaround after four consecutive quarterly falls.
While business grew, SNZ reported the rise in the value of sales was smaller than that for the volume, due to price decreases.
Residential building activity grew 7.4% in the December quarter, but non-residential building permits fell 6.1%, the third consecutive quarter the figure had contracted.
This gave a seasonally adjusted growth in the volume of building work of 0.7%.
SNZ reported the trend for non-residential building activity had been declining throughout 2009 and was now down 13.2% for the year.
While residential activity grew, the department's business statistics manager Louise Holmes-Oliver said the turnaround had come after a period of contraction.
"To put this increase in context, the trend had been declining for two years and the level is still about a third lower than the most recent peak in September 2007."
For the December quarter, the unadjusted value of all building activity was $10.8 billion, down 13.7% of a year earlier.
BNZ economist Craig Ebert said the increase in manufacturing activity exceeded the bank's 1.5% forecast and was excellent news for gross domestic product, which he forecast would be 0.8% for the December 2009 quarter.
Mr Ebert was heartened by news inventory in the manufacturing sector was low, which he said would support future production.
Equally, he had forecast an easing in manufacturing activity instead of a slight increase (0.7%).
"We thought the gains heralded by the pick-up in building consents would begin to show more in the first half of 2010."
