Otago manufacturing above average

Otago and Southland manufacturers still appear to be in good spirits, leading the other regions in the latest performance in manufacturing index (PMI).

The Bank of New Zealand-Business New Zealand PMI, released yesterday, showed the southern region had a reading of 58.8, down from 60.9 in December last year, but ahead of the national result of 53.3.

A PMI reading above 50 indicated manufacturing was expanding.

‘‘The local result is close to the best January on record since the survey began and it seems to have broken the seasonal downturn cycle seen in the last two years,'' Otago-Southland Employers Association chief executive Duncan Simpson told the Otago Daily Times.

Food processing manufacturers performed particularly strongly in January.

The seasonally-adjusted New Zealand PMI had its third consecutive fall. Mr Simpson said although January data indicated expansion, there were concerns about the results.

‘‘Although the seasonallyadjusted result was in positive territory, it was the first time since April 2006 that the unadjusted result showed a decline, alongside a strong shift upwards in terms of the number of negative comments from respondents.''

There was a similar pattern in Otago and Southland, with negative comments rising to 59%. Members cited staff shortages, the value of the dollar and rising costs in general as the reasons for dissatisfaction.

The sudden fall in activity for the central North Island region due to weak production and new order results were also of concern. The central region displayed its worst result since the survey began, recording an index reading of 42.3.

‘‘The next few months should indicate whether the drops are just seasonal, or part of a wider issue relating to a general slowing in manufacturing activity internationally,'' he said.

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