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NZ manufacturing bounces back in September

NZ NewswireNZ Newswire 12/10/2016 Sophie Boot

New Zealand manufacturing activity bounced back in September, lifting expansion levels after two consecutive months of softening expansion.

The Bank of New Zealand-BusinessNZ performance of manufacturing index rose to a seasonally adjusted 57.7 in September, from 55.2 in August and 55.6 in July.

A reading of 50 separates expansion from contraction and the latest reading is above the long-term average of 53.2, and the highest level of activity in the sector since January this year.

New Zealand's manufacturing sector has been in continuous expansion since October 2012, except for January last year when it slipped into contraction with a reading of 49.8.

The economy has been buoyed by a construction boom that started in the post-earthquakes Christchurch rebuild and has extended to Auckland's housing market.

In the latest monthly data, production accounted for the most rapid expansion with a reading of 61.3, up from 56.0 in July. Finished stocks gained 2.9 points to 54.5, new orders rose to 60.9 from 59.3 and deliveries advanced to 57.8 from 56.2.

The September result is "verging on the very strong," Bank of New Zealand senior economist Craig Ebert said in his report.

The employment sub-indice, which had dropped to 47.1 in August, rebounded to 50.3 in September.

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