"Unlike the lackluster results during the middle part of 2012, the 2013 results have not only held up, but have improved since the start of the year"
- Catherine Beard, Business New Zealand executive director for manufacturing
New Zealand manufacturing activity expanded more than expected, posting the best result for the month since 2002. The BNZ-Business New Zealand PMI for July increased 4.3 points to 59.5 from the previous month. A reading above 50 threshold indicates an expansion in the sector, while below 50 shows a contraction. New Zealand manufacturing is bolstered by strong domestic demand from the construction sector on the back of rebuilding Christchurch, which was severely damaged by the earthquake, as well as by demand for housing in Auckland, the nation's biggest city. Domestic demand offsets a weakness in Australia, the biggest trading partner , where the economy is slowing down and strong New Zealand Dollar curbs demand. The nation's central bank expects a sturdy domestic demand growth of 3.8% this year, contributing to a 2.6% gain in GDP.
Overall, the first seven months of 2013 averaged a healthy 56.3, reinforcing a view the sector has been performing strongly. The PMI also showed that all five sub-components were in the green territory as well, with deliveries of raw materials at 62.3, production at 62.2, employment at 53.1, new orders at 62.1. However, finished stocks were the only segment to indicate a marginal decline, down to 52.6 from 52.8 in June.
© Dukascopy Bank SA