Manufacturing activity during January declined nationally and while Otago-Southland was the least affected of the four regions, it remained in contraction.
Three of the five seasonally adjusted sectors were in contraction, though the key indicators of production, at 52.3 points, and new orders, at 56.2 points, remained in expansion, the monthly BNZ Business New Zealand performance of manufacturing index for January showed.
Readings above 50 signify expansion and below 50, contraction.
"The global manufacturing scene reached new highs, with the strongest level of expansion in over five years . . . but New Zealand's result was less robust than the global performance of manufacturing index," Business New Zealand executive director for manufacturing Catherine Beard said in a statement yesterday.
"New Zealand manufacturers were in a better position than a year ago, when the PMI was entrenched in negative territory.
"After five months of solid, if unspectacular, expansion we have now reached a phase where monthly results are consistent and new orders continue to drive activity.
Comments from manufacturers surveyed for the PMI highlight increased offshore orders as a key catalyst for improved activity," Ms Beard said.
While the seasonally adjusted results nationally showed expansion, rising from 42.2 points in January 2009 to 52 last month, all regions declined in unadjusted terms.
The biggest drop was in the Northern region, at 45.8 points, which had shown the strongest level of regional expansion for the previous two months. The Canterbury-Westland region, at 49.7 points, experienced a slight decline, while the Central North Island, at 48.9 points, and Otago-Southland, at 48.8, displayed almost identical levels of activity, she said.
BNZ economist Doug Steel said the combination of strong new orders and lower inventories was a positive sign, and consistent with expectations of a wider economic recovery developing through 2010.
