- Doug Steel, economist at BNZ
Activity in New Zealand's manufacturing sector, which has been hard hit by the strong nation's currency, rose in August, prolonging the period of expansion to two years and reaching the strongest level in five months. The BNZ-Business New Zealand PMI for August climbed to 56.5 from 53 in the previous month, and just slightly below the 56.8 level recorded in the same month last year. Today's data shows the production sub-index reached a 13-month high of 60.1, while new orders inched higher 2.8 points to 58.3. Employment increased 1.7 points to 53.2, hitting the highest level since May, while deliveries advanced 2 points to 55.7. Finished stocks was the only measure recording a contraction at 48.5. Food, beverage and tobacco manufacturing showed the fastest expansion in the month at 66.9, followed by petroleum, coal, chemical and associated product manufacturing at 63.5.
Separately, another report showed that the country's food price index rose in August as vegetable prices increased, adding to signs inflation inched up in the current quarter, which could potentially renew the necessity of lifting interest rates. The Food Price Index rose 0.3% month-on-month in August, according to Statistics New Zealand, following a 0.7% decrease in July, and a 1.4% advance in June. The advance in prices was largely driven by a 8.6% jump in vegetable prices, while lower fruit prices helped offset the rise in the FPI.
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