NZ: Q1 total manufacturing volumes lifted by 2.0% - ANZ

Miles Workman, senior economist at ANZ, notes that the New Zealand’s total manufacturing sales volumes lifted 2.0% q/q in Q1 (seasonally adjusted), following a 2.4% rise in Q4. 

Key Quotes

“Of the 13 manufacturing industries, seven experienced a contraction from last quarter (fruit, oil, cereal and other food; furniture and other manufacturing; textile, leather, clothing, and footwear; transport equipment, machinery and equipment; wood and paper products; chemical, polymer, and rubber products; petroleum and coal products).”

“A 11.4% q/q rise in meat and dairy product manufacturing drove the quarterly lift in volumes, reflecting strong milksolids production this season, and more recently delayed slaughter. In nominal terms, meat and dairy sales rose 6.3% q/q, with softer prices providing a partial offset.”

“Looking through the volatile meat and dairy component, growth in “core” manufacturing volumes continued to weaken, down 1.1% q/q (sa). While core volumes remain at an elevated level, the trend has turned a corner.”

“Despite the healthy lift in meat and dairy manufacturing volumes, today’s print presents some modest downside risk to our Q1 GDP pick of 0.5% q/q.”

“Looking forward, further softness in core manufacturing appears likely as levels struggle to push beyond cycle highs.”