Manufacturing sales on the rise

New Zealand manufacturing sales volumes rose a seasonally adjusted 0.5 per cent in the first quarter, led by gains in chemical and petroleum manufacturing.

Chemical, polymer, and rubber product manufacturing volumes rose 8.5 per cent helped by increased production at New Plymouth-based Methanex New Zealand and following a 0.5 per cent drop in the previous quarter, Statistics New Zealand said. Petroleum and coal product manufacturing increased 5.8 per cent, following a 2.5 per cent decline in the previous quarter, reflecting quarterly volatility, the agency said.

Meat and dairy product manufacturing volumes edged up 0.1 per cent in the first quarter following a 14 per cent jump in the fourth quarter, the agency said. In the latest period, the volume of meat exports rose 6.6 per cent while dairy product exports fell 4.3 per cent following a post-drought jump the previous quarter.

Manufacturing sales data is the last key component of gross domestic product. New Zealand GDP expanded 0.9 per cent in the fourth quarter, for an annual average 2.7 per cent pace.

While this week’s manufacturing and wholesale trade surveys were softer than some expectations, they weren’t weak enough to offset a rise in construction which could lead some economists to upgrade their forecasts for first quarter GDP, scheduled for release June 19.

“The building work data has added that upside risk and this one might have eroded it a little bit but net-on-net you have still got some upside risk,” said UBS New Zealand senior economist Robin Clements.

Data last week showed house building activity grew at its fastest pace in almost 12 years in the first quarter as construction ramped up to rebuild the country’s second-biggest city and fill a housing shortage in Auckland.

— BusinessDesk