NZ: Steady economic survey of manufacturing - ANZ

Analysts at ANZ note that New Zealand’s total manufacturing sales volumes rose in Q4, despite what they suspect was a weather-related hit to meat and dairy production manufacturing sales.

Key Quotes

 ‘Core’ sales posted a reasonable increase, in line with both the growth seen in Q3 and our expectations. The figures therefore have few implications for our views on Q4 GDP growth (out on 15 March). We will look to release a full preview note on the GDP figures shortly.”

“Key Points

• Total manufacturing sales volumes rose 1.0% q/q in Q4, following a 0.4% q/q lift in Q4. Stripping out meat and dairy product manufacturing (which often throw the figures around), ‘core’ sales volumes rose 0.8% q/q. It is the core figure that is most relevant for forming our views on quarterly GDP growth.
• As if often the case, the details were reasonably mixed. Of the 13 manufacturing industries, seven rose, while six fell in the quarter. The biggest contribution to the increase came from petroleum and coal product manufacturing, which rose 17% q/q (although it is not seasonally adjusted). Meat and dairy product manufacturing fell 2.8% q/q, and was likely impacted by the dry weather over the quarter hampering milk production. Metal product manufacturing fell 4.1% q/q.
• Today’s result was not far from our own expectations. Therefore, in itself, the data have few implications for our views on Q4 GDP growth, where we see the manufacturing sector recording a small positive contribution to growth overall.”