Canterbury's manufacturers ready for quake city rebuild

Last updated 05:00 24/01/2014

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Canterbury's manufacturing industry remains robust and ready to benefit from the earthquake rebuild, a business leader says.

That is despite Canterbury- Westland region's reading of 49.9 on the BNZ- Performance of Manufacturing Index (PMI) being behind continued growth for New Zealand manufacturers.

For the first time since 2007, national manufacturing expanded every month in 2013, according to latest PMI reading. The national sector has been in expansion for 15 consecutive months.

The index was 56.4 in December, similar to November's 57.0 and puts the quarter average at 56.5. A figure above 50 shows the sector is expanding and below 50 that it is contracting.

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said there was anecdotal evidence the region's manufacturers were starting to feed into the rebuild and seeing a strengthening position.

"Manufacturers are in pretty good shape in Christchurch and Canterbury. It's not just the rebuild, it is the strong regional economy [including] agribusiness.

The exporting manufacturers . . . are servicing quite niche markets, they are staying strong."

As a result of the earthquakes there continued to be a gradual move by some manufacturers to the southwest part of Christchurch, for example along the new section of southern motorway, though plants would stay in other parts of the city such as Bromley and Woolston.

It was vital that plants such as the Gelita gelatine manufacturing based in Woolston co-existed with the needs of nearby residents, Townsend said. Residents have been concerned about odours from the plant.

"It's a really important business and it's really important they learn to do whatever has to be done to cohabit in that area."

UBS New Zealand senior economist Robin Clements said there had been a trend towards "softening" of expansion in the manufacturing sector in Canterbury/Westland and Otago/Southland.

However, there had been past growth in manufacturing related to the earthquake rebuild and that should continue.

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- BusinessDay

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