South's manufacturing up but still in contraction

Manufacturing activity in Otago and Southland was up slightly during April, but remained in contraction and well below the more positive, seasonally adjusted national rating.

The latest BNZ-Business New Zealand performance of manufacturing index showed Otago and Southland results undermined by softening retail activity, the high New Zealand dollar and decline in anticipated ordering levels.

Index scores above 50 reflect expansion, and below, contraction.

Otago Southland Employers' Association chief executive John Scandrett said the regions' April index at 46.9 was almost on a par with the 46.8 points in March, reflecting ''a flat, contraction-oriented outcome''.

While activity and comments in the food and beverage sub-sector were ''positive'', across the local wood-paper and textile-clothing sectors, comments were less favourable, Mr Scandrett said.

Attention was drawn to a downturn in retail activity, the dollar's ongoing impact, a fall in anticipated ordering levels and some selected, seasonally linked, quieter trading outcomes.

Nationally, there was a continued momentum for new orders in the manufacturing sector, which contributed to a rise in the sector's expansion rate, Business New Zealand's executive director for manufacturing Catherine Beard said.

''Results over the last four months provide a regular pattern of growth, which has been assisted by strong activity for new orders, both domestic and offshore,'' she said.

The seasonally adjusted national index for April was 54.5. It had averaged 54.8 over four months since the start of the year.