Increased manufacturing sales in New Zealand showed a growth of 2.4%, with dairy and meat volumes up.

    by VT Markets
    /
    Jun 8, 2025

    In the first quarter of 2025, New Zealand’s manufacturing sales data indicated a rise of 2.4%. This marked an improvement from the 1.1% increase recorded previously.

    In comparison, the previous quarter experienced a decrease of 1.2%. Sales volume for dairy and meat products increased by 4.1%.

    Recent Data Underscores Growth

    This recent data underscores growing momentum in core manufacturing sectors. The reversal from contraction to more robust volume expansion—particularly driven by dairy and meat output—suggests strong internal dynamics underpinning the primary industry cycle. We are seeing a clear contrast to the weakness seen late last year, when lower global commodity demand and soft domestic orders negatively affected order books. That environment has now shifted toward output gains more in line with historical seasonal patterns.

    The 2.4% quarterly lift in total manufacturing sales is more than double the prior period’s 1.1% gain. While headline figures often mask underlying variation, here the positive contribution from high-volume industries like food processing is evident. Patel pointed to the backward-looking nature of input procurement in the dairy sector, implying that upstream demand for feed, transport, and packaging is expected to maintain momentum into early winter months.

    Given this backdrop, pricing dynamics have already begun to reflect stronger throughput. Raw material cost increases, although largely absorbed over the past year, may start feeding through into wholesale and distribution layers. This changes the nature of forward hedging assumptions for commodity-linked instruments.

    Dairy And Meat Sales Volume

    Of particular note is the 4.1% rise in dairy and meat sales volumes. These sub-sectors, often sensitive to both offshore supply chains and domestic labour availability, appear to be regaining resiliency. Liu noted earlier that output recovery aligns with improved weather conditions and better-than-expected export orders in February and March. We also recognise this is influencing weekly volume contracts in related derivatives, as participants rebalance expectations for Q2 margins.

    There may now be less tolerance for unexpected downside in related agricultural outputs, as sentiment has moved to pricing in moderate volume stability. This changes short-term gamma risk profiles for positions tied to food and producer price indices. Order flow data since the start of April already indicates some shift toward longer duration spreads.

    These developments warrant closer monitoring of regional survey data, including upcoming PMIs and monthly production tallies. Gaps between soft indicators and realised sales data are reducing, allowing for leaner model calibration. Still, short-dated positioning may need to account for potential volatility ahead of RBNZ commentary or updated export statistics.

    In sum, the baseline for manufacturing output is firmer than it was at the end of last year. Larger players have begun lining up second-half forecasts with these stronger Q1 prints. Placement of put/call ratios near recent historical medians suggests a cooler approach—but the move away from a shrinking sales environment has implications not to be overlooked.

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