Manufacturing activity perked up last month as sales and production improved after Covid-19 restrictions were eased.
The BNZ Business New Zealand Performance of Manufacturing Index (PMI) has risen three points in August to 54, showing the sector is expanding.
Most of the sub-indices gained, although finished stocks and deliveries remained below 50 in contraction.
The strongest showing was for the employment sub-index, which rose to its highest level in seven months.
BNZ's head of research Stephen Toplis said the general improvement is more of a catch up for the sector after the lockdowns.
"The fact we're seeing a set of results going the other way is heartening."
He said the improvement in employment showed manufacturers were confident enough to be hiring, albeit at low levels.
Toplis said the softness still apparent in stocks and deliveries fitted with anecdotal reports of blockages in the supply chain.