Otago Southland Employers Association chief executive John Scandrett said there were mixed outcomes for Otago organisations, but on balance this latest outcome pointed toward expansion in the sector "which represented good news".
The monthly BNZ Capital and Business New Zealand performance of manufacturing index (PMI) measures expansion above 50 points and contraction below 50.
Nationally, the seasonally-adjusted PMI for October stood at 50.6, down 0.9 points from September.
Otago-Southland again scored 59 points, with a result similar to September; the central region was 56.3, its highest value since November 2007; and the northern region rose 0.5 to 53.2.
The Canterbury-Westland region improved to 54.7 during October, after a dip in expansion during the previous month.
Mr Scandrett said within Otago there were "mixed readings for organisations in the wood and paper and metal industries and positive comment from those in food and beverage activities".
"Demand for machinery and equipment would still appear to be fluctuating wildly," he said.
He cautioned that while Otago's 59 points in October were satisfactory, it had to be considered in the context that in October 2006 and October 2007, Otago's readings exceeded 62 points.
"Although we are still seeing something of a mixed bag of results across the manufacturing sector, locally there has been a slow but steady trend towards the positive side of the ledger through the past weeks," he said.
Similarly, Business New Zealand chief executive Phil O'Reilly said that while the September result represented "a long time between drinks for the sector", the October result showed "we shouldn't be popping the champagne just yet in terms of a sustained recovery in the sector".
Discussions about the general effects of the recession linger, but those recording positive aspects noted the buildup in orders and activity as part of the pre-Christmas rush, while others had secured contracts previously put on hold by the customer, Mr O'Reilly said in a statement yesterday.
Nationally, the production index stood at 51.2, having sustained a slight drop from the previous month, but still recorded expansion.
New orders were at 53.4, having fallen 2.3 points from September.
Following a positive result in September, employment returned to negative at 46.5.
The deliveries index of raw materials at 49.0 slipped into decline after four consecutive months of improvement, while finished stocks, at 47.4, was the only sub-index which improved from its September result.
BNZ Capital senior economist Craig Ebert said October's "stumble" was a reminder "not to ask too much of the recovery at this early stage".
Manufacturing index
In October. -
Otago-Southland: 59
Central region: 56.3
Northern region: 53.2
Canterbury-Westland: 54.7
