Revival spells relief for manufacturers

Manufacturing bounced back strongly in February after an unexpected ‘‘oddly low’’ result in January.

The latest BNZ-BusinessNZ Performance of Manufacturing Index was up more than 5 points to 55.9 in February, after the sector appeared to tread water in January.

An index above 50 indicates the sector is expanding, and below 50 that it is going backwards.

The index is now back to levels of expansion last seen in November.

BNZ senior economist Craig Ebert said it was ‘‘a relief to see the PMI rebound from last month’s [January’s] oddly low result’’.

Both production and new orders jumped back up to healthy expansion territory. ‘‘These were the main culprits for bringing the overall index down in January,’’ he said.

The new-orders index rebounded right the way up to 61.5, from 50.1.

‘‘Phew!’’ Ebert said in a report on the PMI.

BusinessNZ’s executive director for manufacturing Catherine Beard said the pickup was pleasing and, after the drop in January, the result for February was more in line with the past two years.

New orders bounced back to their highest level for more than a year, which should help boost PMI results in coming months, she said.

Statistics NZ figures out earlier this week showed manufacturing sales volumes were up 0.9 per cent in the December quarter.

But with falling prices, the total value of manufacturing sales fell $180 million in the quarter, after a $259m fall in the September quarter.

Falling dairy prices punched a hole in values in the December quarter.

While the manufacturing figures showed modest sales growth, a rundown in stock levels suggested a fall in actual production, economists said.