Otago-Southland leading the country

Otago Southland manufacturing had food and beverage emerge as a strong sector in the survey;...
Otago Southland manufacturing had food and beverage emerge as a strong sector in the survey; pictured, the Octagon in Dunedin yesterday. Photo by Gregor Richardson.
Manufacturing in Otago-Southland leads the country - underpinned by production - with the overall index having been in expansion mode for the past 18 months.

The monthly BNZ-Business New Zealand performance in manufacturing index indicates Otago Southland built from 56.4 points in January to 61.7 in February; eclipsing the national figure of 56.2. Readings above 50 indicate expansion and below 50, contraction.

From January to February, the Otago-Southland index recorded a substantial rise in its production sub-index, which was an ''instrumental factor'' in driving the regional index to a national-leading 61.7 value points, Otago-Southland Employers Association chief executive John Scandrett told the ODT.

''Across the board, as one would expect given this strong outcome, survey feedback is directly oriented towards the expansionary tracking patterns seen,'' Mr Scandrett said.

However, he noted there was ''some disquiet'', especially where cross-rate New Zealand and Australian currency issues ''challenged net returns'' in selected metal and packaging industry activities.

Otago Southland's recording was well ahead of next-placed central North Island on 57.3, followed by Canterbury/Westland's 53.7 and northern North Island's 52.9. It mirrored last year's February result, which Otago Southland also led.

John Scandrett
John Scandrett
Business New Zealand executive director for manufacturing Catherine Beard said that the manufacturing index was going through one of its most stable periods of expansion since the survey began.

''The last six months of manufacturing expansion have remained at the 56-point value, which represents a very solid level of activity.

''Although new orders [nationally] slipped somewhat in February, production remains buoyant, while employment has shown more positive growth for two of the last three months,'' she said in a statement.

Mr Scandrett said food and beverage sentiment again emerged as a ''solid plank'' in the Otago Southland index.

Comments from that sub-sector indicated some successful new marketing strategies were at least partially behind the generation of the positive outcomes.

''It's also good be able to point to forward momentum in the clothing and textile sector, as quite often this business, at least on the domestic market, has to face variable tourist flow factors,'' Mr Scandrett said; singling out recent strength in Chinese visitor numbers.

BNZ senior economist Craig Ebert said the ''real news'' in the index was its employment index, which was close to its highest since 2003.

''This is evidence that the economic upswing is gaining momentum, spreading across industries and fully radiating into the labour market.''

- simon.hartley@odt.co.nz

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