Manufacturing again leading the way forward

The news today that manufacturing is the main driver of the 0.8 per cent growth last quarter of 2009 is reassuring, the Employers & Manufacturers Association (Northern) says.



“The manufacturing-led recovery is from a depleted base, and we have a long way to go to get back to trading levels of 2007,” said Bruce Goldsworthy, EMA’s Manager of Manufacturing Services.



“The recovery in manufacturing has been well telegraphed in our polling for the Bank of New Zealand/ Business NZ Performance of Manufacturing Index (PMI) late in 2009, but its not universal.



“From anecdotal information, the PMI and Statistics New Zealand’s Economic Survey of Manufacturing, several contributing factors should be borne in mind:

· Some manufacturers had run down their supplies and are re-stocking

· Demand from Australia, by far our biggest export market for manufactures, is holding up, especially with our dollar highly competitive in Australia.

· The building sector is showing signs of recovery

· Asian markets are proving valuable particularly for food and beverages.



“No evidence has yet emerged of sustained growth across all the manufacturing sector though most firms are cautiously optimistic.



“Employment opportunities have also been picking up albeit tentatively.



“The decline has been stabilized and provided the New Zealand dollar remains about where it is we may well be starting a long and laborious climb back to full capacity and profitability.”