March 8 (Bloomberg) -- New Zealand manufacturing volumes rose for the first time in three quarters on production from meat and dairy processors.
Manufacturing sales excluding inflation, a gauge of the volume of production, gained 1.3 percent in the final three months of last year from the third quarter, when they fell a revised 1.7 percent, Statistics New Zealand said in Wellington today. Excluding the volatile meat and dairy industries, volumes fell 0.7 percent.
A recovery in manufacturing, construction and exports adds to evidence that the economy posted modest growth in the three months through December. Central bank Governor Alan Bollard today lowered his forecasts for economic growth in the 12 months ending March 31, saying the currency’s 11 percent rise in the past year had made imported goods cheaper, hurting local manufacturers who compete in the same markets.
“Favorable weather conditions resulted in very strong milk production,” Nick Tuffley, chief economist at ASB Bank Ltd. in Auckland, said in a note on March 5. Excluding meat and dairy, manufacturing “remained relatively weak,” he said.
New Zealand’s dollar was little changed after the report, buying 81.66 U.S. cents at 10:51 a.m. in Wellington.
Meat and dairy processing, which make up 31 percent of total industry production, rose for the first time in three quarters, gaining 3.2 percent, today’s report showed. Dairy exports were a record in the fourth quarter, the statistics agency said.
Seven of the 13 industries showed declines, the statistics agency said. Transport equipment, machinery and equipment manufacturing led the falls, decreasing 4.7 percent.
Manufacturing sales values rose 1.2 percent from the third quarter, when they gained a revised 0.2 percent, today’s report showed. Excluding meat and dairy, sales values advanced 0.1 percent.
Manufacturing is a key component of gross domestic product, which will be published on March 22. Reports the past month have shown construction, export volumes and retail spending also gained in the fourth quarter.
Bollard, who earlier today held the nation’s benchmark interest rate at a record-low 2.5 percent, said in a statement after the announcement that GDP would rise 1.8 percent in the year ending March 31, down from the 2 percent he predicted in December. He expected GDP rose 0.6 percent in the fourth quarter.
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