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Manufacturing activity has improved to its best level in more than a year with a sharp increase in new orders.
The BNZ-Business New Zealand performance of manufacturing index (PMI) rose 1.4 points in August on the previous month to 54.9, the highest since July 2021.
A reading above 50 indicated the sector was in expansion.
The main driver of the increase was new orders gaining 8.9 points to 59.2, a 12-month high and well above its long-term average.
The other sub-indices rose as well, albeit more modestly, and all were in expansion territory for the first time in three months.
BNZ senior economist Craig Ebert said the survey showed a sector holding its own, but there were mixed signals regarding employment.
"It's hard to understand where firms are getting the extra workers from, but this is what the results infer.
"At the same time, problems with staffing remained to the fore, judging by respondents' feedback. Absenteeism is obviously still a big thing, as workers call in sick."
The strongest regional manufacturing activity was in the South Island, ahead of the upper North Island, with the lower half of the North Island the only region in contraction.
Ebert said New Zealand's manufacturing sector was perkier and in better shape than many others around the world, some of which have been contracting or growing more slowly.
"The good news is that the global PMI is not yet contractionary and is miles above the sub-40 levels that have tended to mark obvious recessions in the past. Still, it will bear monitoring in the months ahead."
