New Zealand manufacturing sales volumes rose a seasonally adjusted 0.5 percent in the first quarter, led by gains in chemical and petroleum manufacturing.
Chemical, polymer, and rubber product manufacturing volumes rose 8.5 percent helped by increased production at New Plymouth-based Methanex New Zealand and following a 0.5 percent drop in the previous quarter, Statistics New Zealand said. Petroleum and coal product manufacturing increased 5.8 percent, following a 2.5 percent decline in the previous quarter, reflecting quarterly volatility, the agency said. (See graph below)
Meanwhile, meat and dairy product manufacturing volumes edged up 0.1 percent in the first quarter following a 14 percent jump in the fourth quarter, the agency said. In the latest period, the volume of meat exports rose 6.6 percent while dairy product exports fell 4.3 percent following a post-drought jump in the previous quarter.
Manufacturing sales data is the last key component of gross domestic product. New Zealand GDP expanded 0.9 percent in the fourth quarter, for an annual average 2.7 percent pace. While this week's manufacturing and wholesale trade surveys were softer than some expectations, they weren't weak enough to offset a strong 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. "This is consistent with a 1 to 2 percent GDP for manufacturing which means some upside risk on my GDP forecast for 1.1 percent."
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.
Westpac bank also said it may revise up its preliminary forecast for 1.1 percent first quarter GDP growth when it finalises its estimate tomorrow.
"The weight of evidence suggests that March quarter GDP growth is likely to come in higher than our initial forecast of 1.1 percent," Westpac senior economist Michael Gordon said in a note. "Last week's construction figures were massively stronger than expected, more than offsetting this week's wholesale trade and manufacturing surveys, which on the whole were a little softer than we had assumed."
The value of seasonally adjusted sales at current prices was 0.6 percent higher from the previous quarter, Statistics New Zealand said.
|RAW DATA: Economic Survey of Manufacturing: March 2014 quarter (PDF)||322.06 KB|