The volume of manufacturing sales to June fell 0.7%, following a first-quarter rise of 1.4%, Statistics New Zealand (SNZ) data revealed yesterday.
ASB economist Jane Turner said that during the quarter, declines in construction, manufacturing and wholesale trade would offset growth in retail and housing related activity.
"The production indicator generated from data, on a GDP basis, suggests core manufacturing activity declined 1% over the second quarter. As a result, we have revised our GDP forecast even lower, with growth of just 0.1%," she said in a statement yesterday.
Total sales declined 0.7%, led by falls in meat and dairy, while in manufacturing there were large declines in coal and petroleum, chemical, polymer and rubber manufacturing which drove much of the weakness, she said.
While yesterday's release, along with the recent building work and wholesale data from SNZ, are too late to be included in the Reserve Bank's monetary policy forecast due on Thursday, Ms Turner said the results reinforced the lack of urgency for the Reserve Bank to lift the interest-driving official cash rate from its historical low of 2.5%.
Decreases in seasonally adjusted sales volumes were recorded in the quarter for nine of the 13 industries, with four increasing.
"The trend for manufacturing sales volume, which gives a longer-term picture of movements, has been fluctuating for several years and is now 7.6% below the September 2007 quarter peak," industry and labour statistics manager Kathy Connolly said in a statement.
The main contributors to the fall in the volume of manufacturing were chemical, polymer, and rubber product manufacturing down 5.4%, meat and dairy product manufacturing down 1.2%, and petroleum and coal product manufacturing, down 2.6%.
Partly offsetting those falls in sales volume were a 3.1% rise in the beverage and tobacco product manufacturing industry and a 5.9% rise in the printing industry, she said.
