Manufacturing still on a roll
Manufacturing barrelled on in January, riding the house-building boom, an industry survey says.
The sector has been on a strong roll for almost a year and a half, and continued the run in January, despite the big rise in the exchange rate with Australia.
The latest BNZ-Business NZ Performance of Manufacturing Index was at 56.2 points in January.
A figure above 50 indicates the industry is expanding, while a figure below 50 shows the sector is falling back.
The sector has now been in expansion for 16 consecutive months, with the last six months also averaging 56.2.
BusinessNZ's executive director for manufacturing, Catherine Beard, said despite Christmas and the holiday season, the sector had begun 2014 the way it finished 2013.
"Positive comments from manufacturers revolved around a growing confidence by consumers, further gains in building construction and continued high levels of new orders, both domestically and offshore," Beard said.
"In particular, the metal product sector is currently benefiting from the strong residential construction boom, which will no doubt continue for some months to come."
BNZ economist Doug Steel said it would be easy to understand if the PMI had lost a bit of heat in January, given the hefty lift in the exchange rate.
However, the PMI had barrelled on, as domestic demand strengthened.
The New Zealand dollar briefly peaked at more than A95 cents last month, but has recently settled back to about A92c, still a strong headwind for manufactured exports across the Tasman, compared with an exchange rate of under A80c early last year.