New Zealand manufacturing activity at 9 year high

Activity in New Zealand's manufacturing sector reached its highest level in almost nine years last month, according to the latest performance of manufacturing index (PMI) out Friday. The BNZ-Business New Zealand PMI for May was 59.2, on a scale on which a reading above 50 indicates expansion and below 50 contraction. This was the highest level of overall expansion since June 2004 and was the highest May result since the survey began in 2002. Business New Zealand executive director for manufacturing Catherine Beard said the May result showed strong activity in the key sub-indicators of new orders and production, which significantly boosted the national figure. "Also, after a lengthy period of time in the doldrums, employment picked up in May," Beard said in a statement. Comments from survey respondents outlined the improving construction sector, increasing offshore orders and new customers/ opportunities. BNZ economist Doug Steel said it was a big PMI result even by global standards "The strong result essentially gives us more confidence that the recent and forecast upswing in construction activity will flow through to manufacturing activity, with the usual lag," Steel said in the statement. New orders, at 63.1, had the highest result among the five main sub-indices, followed by production (60.5), employment (55.3), deliveries (54.6) and finished stocks (51.8).