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New Zealand Manufacturing Growth Near Stagnation

New Zealand manufacturing sector was close to stagnation in May, the latest BNZ survey showed Friday.

The BNZ-BusinessNZ Performance of Manufacturing Index fell 2.5 points to 50.2 in May. This was the lowest score since December 2012.

The production sub-index declined to 46.4 in May from 50.1 a month ago. This was the lowest since April 2012. A score below 50 indicates contraction in the sector.

As a growth risk indicator it may not be flashing bright red just yet, but it is moving in that direction in taking on a darker shade of amber, Doug Steel, a senior economist at BNZ Research said.

The PMI sends a warning signal for near term growth via its mix of falling production, near flat new orders, and rising inventory, Steel added. Next week's first quarter GDP should be reasonable, but beyond this downside risks are accumulating.

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