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New Zealand manufacturing activity expanded for an 18th straight month in February with signs a buoyant economy is creating jobs.
The BNZ-BusinessNZ seasonally adjusted performance of manufacturing index edged lower to 56.2 in February from an upwardly revised 56.3 in January, and 55.4 in February last year. A reading above 50 indicates expansion in the sector.
The latest index suggests the manufacturing sector's upswing remains well in force into the early stages of this year, BNZ said. Over the past year, the employment index has jumped from a breakeven level of around 50 to 54.4 in the latest reading, which is close to a record for a sector that has tended to lag other measures.
"This is further evidence that the economic upswing is not only gathering momentum, and spreading across the various industries, but it's now also fully radiating in the labour market," said BNZ senior economist Craig Ebert. "The labour market data, while lagged, could well prove the most important macro-economic information this year."
Four of the five main seasonally adjusted diffusion indexes in the PMI expanded in February. Production produced the highest level of expansion for the first time since July, while employment rose to its second highest level since May, deliveries remained similar to January while finished stocks increased slightly. Meantime, new orders slipped to its lowest level since June.
All four regions were in expansion during February, with only the Northern region slipping from January levels. Otago had the strongest reading at 61.7.