New Zealand manufacturing activity expanded in November, with high orders and lean inventory suggesting the pick-up in production will continue.
The BNZ-BusinessNZ seasonally adjusted PMI rose to 56.7 in November from 55.9 in October and 50.2 in November last year. A reading above 50 signals expansion.
The manufacturing sector has been in expansion for 14 consecutive months, with the PMI averaging 56 so far this year, significantly better than last year's average of 50.9. The expansion occurred across the entire country and in all the manufacturing sub sectors, indicating broad based activity.
Bank of New Zealand senior economist Craig Ebert noted the combination of high orders and lean inventory suggested manufacturing production will continue to post strong expansion following great gains over recent months.
"We're certainly looking for manufacturing activity to log a strong expansion over the second half of 2013 after a June quarter that was knocked by the lagged effects of the early-2013 drought," Ebert said in a statement.
New orders recorded the highest reading in the latest survey at a seasonally adjusted 62, compared with 60.7 in October and 51.7 in November last year. Production at 59.4 and deliveries of raw materials at 56.7 both increased to their highest level of activity since July. Employment increased to 53.3 while finished stocks dropped to 50.2 although remained in expansion.
Key sectors such as metal product manufacturing were showing "stellar levels" of activity, helped by a boom in construction, BusinessNZ executive director for manufacturing Catherine Beard said in the statement.
For the first time since November 2010, all areas of the country displayed post-60 levels of expansion.
The robustness of the latest survey indicated activity had broadened outside of Canterbury, where activity is higher as a result of rebuilding following a series of earthquakes, Ebert said.
The Northern region recorded its highest level of activity since November 2009 while the Central region posted its highest level of activity since November 2002.The Canterbury/Westland region continued its onwards momentum while the Otago-Southland region showed a similar result to the same time last year.
Survey respondents noted a stronger pre-Christmas rush compared with previous years, BusinessNZ's Beard said.