The BNZ-BusinessNZ performance in manufacturing index (PMI) was 59.2 for May, the highest level of overall expansion since June 2004. Compared with previous May results, the 2013 value was the highest since the survey began in 2002.
In the regional break-out, Canterbury-Westland unsurprisingly led with 67, followed by Otago-Southland on 60.7, northern on 60.5 and central on 55.4. A reading above 50 indicates expansion and below 50, contraction.
Otago-Southland Employers Association chief executive John Scandrett told the Otago Daily Times last month there was ''some light in the manufacturing tunnel'' because the robust level of the forward new orders suggested there would be a regional PMI uplift in May.
''While we don't always get such predictions right, we appear to have on this occasion. The local region's May PMI reading delivers a strong swing into expansion mode overall,'' he said yesterday.
Again, the new orders subindex, at 71.1 points, presented a solid indication the sector strength appeared to be well-founded.
Across subsector manufacturing activity levels, there was not always a consistent flow of survey feedback.
''But in respect of the May PMI, we can point to the fact that all our food and beverage respondents are, on this occasion, neatly aligned on the positive side of the fence. There are buoyant comments on various seasonal and promotional factors driving stronger demand - some of which is retail-based - and that is a good sign.''
Within the textile/clothing and wood/paper products manufacturing sectors there was quite diverse feedback, some supporting expansionary activity and some commenting on evident weakness, Mr Scandrett said. Exporters were experiencing barriers because of currency issues and there appeared to be some slippage in various locations where a tourism-connected business downturn remained the order of the day, he said.
BNZ economist Doug Steel said the official manufacturing data out on Monday for the first quarter of the year looked soft, sales volumes being down 0.6% and values up only 0.2%.
''But rather than curb our optimism, the details of the data and more particularly the strength of other indicators actually have us gaining more confidence in our positive leanings towards the manufacturing sector.
''We contend the sector is stronger than first-quarter headline sales figures would have you believe.''
The sales figures, taken in conjunction with inventory sales revealed in Monday's data, suggested there was production expansion. Coupled with directly measured food-processing data, Mr Steel judged manufacturing production rose around 1% in the first quarter of the year.
However, it was the leading indicators that were much more encouraging than a potential increase that went into inventory a quarter ago - even if that inventory build occurred in anticipation of higher sales ahead.
''Today's PMI is important in this regard. It is a stunning result. It is a significant lift from April's already very solid reading of 55.2 and a world away from last year's average of 50.9.
''We do not say `stunning' lightly. PMI readings do not get much bigger than this, even globally during better times than prevail offshore at present.''
In the current context, New Zealand's PMI was ''head and shoulders'' above its global peers, he said. New Zealand's PMI not only added to the sense of acceleration in the manufacturing sector in 2013 to date, but indicated expansion was now occurring at a rapid rate, Mr Steel said.
