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Analysts at ANZ note that the New Zealand’s total manufacturing sales volumes rebounded 2.0% q/q in Q4 (seasonally adjusted), following two consecutive declines (-1.1% in Q3 and -1.8% in Q2).

Key Quotes

“Of the 13 manufacturing industries, four experienced a contraction from last quarter.”

“A 4.0% q/q rise in meat and dairy product manufacturing drove the quarterly lift in volumes, suggesting strong milksolids production this season is now working its way through.”

“Looking through the volatile meat and dairy component, growth in “core” manufacturing volumes was weak, down 0.4% q/q (sa). All up, core volumes remain at an elevated level, but are struggling to push higher. In nominal terms, core manufacturing fell 0.3% q/q, suggesting prices lifted modestly.”

“Taken together with today’s Building Work Put in Place Survey, which was stronger than expected, we see balanced risk to our provisional Q4 GDP estimate of 0.6% q/q.  We will release a full preview note on our GDP expectations next week.”