The manufacturing sector grew at a faster rate last month and there are signs it will rebound in the second quarter, after slipping at the beginning of the year.
File pic Photo: 123RF
The BNZ-Business NZ Performance of Manufacturing Index rose 1.7 over May to 52.9, slightly below the long term average - a reading above 50 indicates expansion.
The sub-measures of employment, production and deliveries of raw materials returned to positivity.
It comes after yesterday's gross domestic product figures showed manufacturing output fell 1.4 percent in the first three months of the year.
BNZ senior economist Craig Ebert said the latest PMI reading indicated a rebound incoming and the sector recovering over the second quarter.
"There was a lot of mixture in the details, I mean the broad point is that this index has recovered to what we'd describe as a fairly normal rate of expansion.
"It's not what you'd call strong but it's certainly above that 50 break-even mark. So 52.9 is actually a reasonably good result."
Ebert said new orders softened during the month, hinting at diminishing excess demand.
"To the extent excess demand is abating, so too will be core inflation pressure. Having said this, it was clear from respondents' comments to May's PMI survey that lack of staff and lack of materials were still dominating the negative chat."
