New Zealand manufacturing activity rose in June from an 18-month low in May, led by a pick-up in production and deliveries.
The BNZ-Business NZ seasonally adjusted performance of manufacturing index rose to 53.3 in June from a downwardly revised 52.6 in May, although below 54.9 in June last year. A reading above 50 indicates expansion in the sector.
The manufacturing sector has been in expansion for 21 consecutive months although growth is moderating, with new orders declining for a third month to 50.9, the lowest level since December 2012, while the measure of finished stocks and employment also weakened. The PMI three-month average slipped to 53.4 from 56.9 three months ago.
"It's still growth, but not quite as we've known it," Bank of New Zealand senior economist Craig Ebert said in a note.
The weak spot seems concentrated in new orders, Ebert said.
"It's something to watch, while not getting any knickers in a twist for the meantime."
All five seasonally adjusted main diffusion indices were in expansion in June, except finished stocks which dipped to 49.7 from 52.3 in May.
Of the four regions, Otago-Southland was the only area to record a contraction in June, edging up to 48.8 from 48.1 the previous month. Canterbury/Westland was the most buoyant region at 56.6, followed by central at 52.8 and the Northern region only just in expansion at 50.6.