New Zealand manufacturing sales volumes posted their biggest quarterly decline in five years as the Marsden Point oil refinery shut for maintenance and an outage reduced output from the Pohokura gas field.
The volume of manufacturing sales fell a seasonally adjusted 1.2 percent in the three months ended June 30, compared to a 1 percent expansion in the March quarter, Statistics New Zealand said. The smaller volume was driven by an 8 percent slide in petroleum and coal product manufacturing sales and a 7.9 percent decline in chemical, polymer and rubber product manufacturing.
The period covered New Zealand Refining’s planned maintenance shutdown at the Marsden Point refinery, which dragged on longer than expected. It also included an extended outage at the Pohokura field, which restricted operations by methanol producer Methanex.
“The fall in petroleum product manufacturing was a consequence of the maintenance shutdown at the Marsden Point refinery,” manufacturing statistics manager Sue Chapman said in a statement. “The fall coincided with an unscheduled outage and maintenance of a processing plant, resulting in gas restrictions affecting methanol production.”
The manufacturing survey is the final tranche of second-tier data economists will use to firm up their forecasts for second-quarter gross domestic product. New Zealand’s economy expanded 0.5 percent in the March quarter and the Reserve Bank estimates it grew at that same pace in the June quarter.
The manufacturing survey’s shrinking sales volumes are in line with the BNZ-BusinessNZ performance of manufacturing index through the same period. The PMI registered slowing growth in production, finished stocks, and deliveries through the June quarter. Since then, the July reading deteriorated further at a headline level with production contracting that month.
Still, today’s figures show the value of manufacturing sales rose 1.8 percent, accelerating from a 0.7 percent increase in March. Unadjusted sales values rose 6.1 percent to $28.2 billion in the quarter from a year earlier, while the volume of sales increased 1.6 percent. New Zealand’s terms of trade are near a record as a weaker kiwi dollar has offset declines in commodity prices, and maintained the value of local producers’ goods sold into foreign markets.
The volume of meat and dairy production sales rose a seasonally adjusted 1.6 percent in the June quarter, slowing from a 2.1 percent pace in March. The value of sales climbed 4.5 percent.
The volume of finished goods inventories shrank 14 percent in the quarter. The value of raw material inventories rose 3.8 percent in the quarter. Data last week showed wholesalers’ inventories grew 4.1 percent in the quarter, largely in motor vehicles and autoparts, and grocery, food and liquor products.