Lower demand and weaker global prices for our key export products are showing through in manufacturing sales volumes.
Total manufacturing sales volumes moved slightly above the line in the March 2012 quarter compared to the same time last year - up 0.91 percent! Meat and dairy product processing is our largest area of manufacturing, and sales volumes in this sector were down in the March 2012 quarter compared to the March 2011 quarter. Year-on-year sales volumes in this sector recorded a disappointing result, up less than one percent.
Year-on-year, manufacturing activity was up in transport equipment and machinery manufacturing, and metal product and chemical product manufacturing. However, as the figure above indicates, New Zealand manufacturers are struggling in the current environment. This is also reflected in the manufacturing surveys that we monitor. The BNZ-Business NZ seasonally adjusted PMI stood at 50.2 in June, indicating that manufacturing activity has eased from May.
New orders and production recorded results above 50, with results of 51.2 and 50.8 respectively. However when we look at the three monthly averages for these indices, both sat just above 50, at 51.3 and 50.0 respectively. The indices for employment and deliveries both recorded a contraction in June. At a regional level, this downturn in activity can also be seen through a comparison of the three-monthly average for each of the regions, year-on-year. Only the Northern region recorded a result above 50, indicating manufacturing activity was expanding.