WELLINGTON: A measure of New Zealand’s manufacturing sector held steady in January, rebounding from a soft end to 2016, with the underlying trend continuing to show solid growth. The Business NZ manufacturing performance of manufacturing index (PMI) came in at 54.5 in December, unchanged from the previous month. A PMI above 50 signals expansion, while a reading below that threshold points to contraction.
The monthly PMI series averaged 56 throughout the year, the second-highest annual average since the survey began in 2002. Manufacturing output in New Zealand has been in nearly continuous expansion since 2012. The Business NZ monthly survey provides an early indicator of economic activity in the country’s manufacturing sector.
New Zealand’s manufacturing upturn has been supported by a construction boom, especially in Auckland, the country’s main economic hub. Building volumes are expected to increase in the short-term, as population growth and high demand continue to support activity in the sector. Manufacturing accounts for roughly 12% of New Zealand’s gross domestic product (GDP). The sector was a positive contributor to third quarter growth, along with construction, transport, business services and household consumption. The economy expanded 1.1% in July-September, Wellington’s statistics bureau reported last month.