Auckland's Manufacturers Lead Expansion

Auckland's Manufacturers Lead Expansion

Media statement
Friday, December 17th, 2004

Auckland's manufacturers lead expansion. Investment -led growth imminent?

Manufacturers in the north, and the larger companies amongst them, are expanding faster than elsewhere in the country, according to the ANZ/Business NZ Performance of Manufacturing Index for November. The Employers & Manufacturers Association (EMA) gathers the data on which the index is based.

"Auckland is running hot heading into Christmas," said Bruce Goldsworthy, EMA's Manager of Manufacturing Services.

"Business is making life easy for Dr Cullen; his hardest choice is how much of the business dividend to spend on education and health.

"The PMI indicates our manufacturers in November enjoyed their best month since the index started 28 months ago. The number of respondents to the survey was also strong at over 350 nationally.

"The rise in the PMI in the north last month was a startling 11.2 points to put the index at 68.0. The New Zealand index overall was well ahead of directly comparable indices in Australia (53.1), the US (57.8), and Europe (52.4, Oct.). A figure above 50 equates to expansion and below, contraction.

"Furthermore, as stocks of finished goods were low and new orders were keeping pace with production levels, the expansion cycle should run awhile longer.

"With new trade deals coming forward next year, and the ongoing rapid growth of Asian markets, there's every reason for the present level of business confidence to continue.

"As skills and general labour are also in demand, and the exchange rate is attractive for purchases offshore, the New Year should bring a surge of investment in new plant and equipment.

"This would complete a virtuous economic cycle with investment-led growth taking off."

ENDS

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