Manufacturing in Otago and Southland led the country in August, posting its first gain since January on the back of boat-building, the metal industry and selected food manufacturers.
The Otago-Southland region has been struggling throughout the year to break through the threshold into expansion mode on the BNZ - Business New Zealand performance of manufacturing index (PMI), which was released yesterday.
A PMI reading above 50 indicates manufacturing is expanding and below 50 is in decline.
Nationally, the PMI fell from 53.2 in July to 52.9 in August, while in the Otago-Southland region the overall PMI leapt from July by 13.3 points to 61.8 for August.
Otago-Southland Employers Association chief executive John Scandrett said the 13.3 point gain was a "substantial improvement".
"The metal industry, boat-building and selected food manufacturing sector improvements lead the way when we review who is doing well. There are signals, too, that dairy farming spending is starting to stimulate certain key elements in the local manufacturing mix," Mr Scandrett said.
Business New Zealand's executive director for manufacturing, Catherine Beard, said the negatives for August were equally matched by positives elsewhere.
"Over the last four months we've experienced the steadiest period of activity since the survey began in 2002," she said in a statement yesterday.
While elements of the manufacturing sector, such as those by region and sub-industry fared worse in August, this was countered by pick-ups elsewhere, "notably the Otago-Southland region and the metal product manufacturing sector", she said.
Mr Scandrett said the August survey for Otago-Southland reflected strong gains across deliveries of raw materials, new orders, and production levels.
"While overall we can be bullish about the August outcome, it is still important to note that some parties hold continuing concerns around currency constraints on net returns," he said.
There were also still negative comments about the global economic problems and how they might impact generally on trading activities, he said.
BNZ economist Doug Steel said August's PMI continued a remarkably steady run over recent months, but cautioned that it masked considerable and widening variation in the detail.
"While this variation reflects the many factors pushing and pulling the economy, it is encouraging to see the overall trend remain positive," Mr Steel said.
The Canterbury Westland region built on its solid result in July to 57.2, with three of the last four months showing expansion levels over 56. In the North Island, the Northern region continued to slip with its lowest result since January 2011 at 51.5, while the Central region, at 49.9, also fell to a level of almost no change for August.
