A lift in the volume and value of New Zealand manufacturing sales in the fourth quarter of 2017 helped solidify economists' views for a solid reading for this week's gross domestic product figures.
Data from Statistics New Zealand (SNZ) showed the volume of all manufacturing sales rose a seasonally adjusted 1% in the December quarter while the value increased 2.8%.
Seven of the 13 manufacturing industries reported increases in the December quarter.
The ANZ Bank New Zealand senior economist Phil Borkin commented: “It was broadly in line with our expectations and doesn't alter our view on the GDP outlook for the quarter. Overall, the manufacturing sector is chugging along.”
ANZ is expecting this week’s data would show the economy expanded 0.7% in the quarter. GDP figures are due this Thursday.
The website NZCity also said ASB Bank expects GDP expanded 0.8% on the quarter though senior economist Jane Turner said the data - outside of primary manufacturing production indicators - points to relatively flat manufacturing production.
The SNZ data showed the value of petroleum and coal product manufacturing rose 23% and volumes rose 17%.
“The December 2017 quarter's rise in petroleum and coal product manufacturing follows falls in the June and September quarters,” SNZ manufacturing manager Sue Chapman reported.
“This is the largest percentage rise since December 2008, and the third-largest since the series began.”
Meat and dairy product manufacturing, which accounts for almost a quarter of production, reported a 2.8% decline in sales volumes in the quarter, while sales values lifted 3.9%.
Phil Borkin said the decline was not a surprise as dry weather in the quarter hampered milk production. The actual volume of total manufacturing sales was up 1.4% from the previous December quarter.
When price changes are included, the value of manufacturing sales was $29.6 billion in the December quarter, up $2.7 B from the December 2016 quarter.