- Doug Steel, senior economist at Bank of New Zealand
New Zealand manufacturing activity continued to increase in October, albeit at a slower pace than a month earlier. The BNZ-BusinessNZ performance of manufacturing index dropped to a seasonally adjusted 53.3 last month, down from 55 in September, marking the lowest level since May. The nation's manufacturing sector has been growing since October 2012. Even though four of the five sub-sectors of the index dropped, all but finished stocks remained in expansion. The data showed the measure of new orders fell to 55.9 from 57.4 in September, production declined to 53.1 from 57.5, deliveries dropped to 52.5 from 55.2, and finished stocks decreased to 49.2 from 52.4. Meanwhile, employment rose to 52.4 from 51.1.
Earlier in the week the Reserve Bank of New Zealand said low milk prices and Auckland's soaring housing market remained the key risks to the New Zealand's financial system. The central bank reported that risks to financial stability increased since May due to build up in Auckland house prices relative to incomes, ongoing weakness in global dairy prices, as well as China's slowdown and its impact on commodity prices.
© Dukascopy Bank SA