NZ first-quarter manufacturing volumes fall, led by declines in dairy and meat

The volume of New Zealand's manufacturing sales fell for a second straight quarter in the first three months of this year, but the values rose due to higher prices.

The volumes of total manufacturing sales fell a seasonally adjusted 0.3 percent in the March quarter, compared with the December quarter when they dropped 2 percent, Statistics New Zealand said. The value of manufacturing sales rose a seasonally adjusted 2.8 percent, following a 1.3 percent increase three months earlier.

Meat and dairy product manufacturing led the decline in volumes in the latest quarter, falling 7.8 percent, although the sales values for those commodities increased 1.1 percent. Excluding meat and dairy product manufacturing, sales volumes rose 1.7 percent, while values increased 3.5 percent.

"The fall in meat and dairy sales volumes followed a similar fall in the previous quarter," Stats NZ business indicators manager Craig Liken said. "In contrast, sales values were up $77 million, mainly reflecting a rise in dairy product prices."

New Zealand's manufacturing sector has been in almost continuous expansion since October 2012, based on the Bank of New Zealand-BusinessNZ performance of manufacturing index. However, over the longer-term, manufacturing has declined as a percentage of the economy, from about 26 percent of gross domestic production 40 years ago to about 13 percent in 2009, with a rise in services, now the biggest contributor to GDP.

The trend for the total manufacturing sales volume, which gives a longer-term picture of movements, has been mainly rising since mid-2013 but now appears to be easing, Liken said.

Of the 13 manufacturing industries measured, volumes of seven rose in the latest quarter, while five fell and one remained unchanged. Petroleum and coal product manufacturing volumes increased 5.7 percent, while chemical, polymer and rubber product manufacturing rose 7 percent.

In terms of the value of manufacturing sales, chemical, polymer and rubber manufacturing increased 9.8 percent, while petroleum and coal product manufacturing rose 9.7 percent.

The volume of finished goods stocks, which is not seasonally adjusted, was 1.6 percent higher in the first quarter of this year than the same period a year earlier, Stats NZ said.

(BusinessDesk)