By James Glynn
SYDNEY--New Zealand's economy is showing signs of a full blown recovery with manufacturing activity surging in December to its highest level since 2021.
The BusinessNZ performance of manufacturing index rose 4.4 points to 56.1 points in December from November, well above the average of 52.5 points since the survey began.
All five sub-index values were in expansion during December, led by new orders, which achieved its highest level of activity since July 2021.
The upbeat data suggests that aggressive cuts in interest rates since mid-2024 are finally starting to gain traction and lift the economy out of an extended period of gloom.
Production also showed a significant lift in activity, while employment continued to recover after a number of months exhibiting declines during 2025, according to the survey.
The proportion of positive comments from respondents stood at 57.1% for December, which was up from 54.4% for November and 45.9% in October.
The strength of the report reflects activity ahead of Christmas and firmer confidence levels across the economy.
Despite trade uncertainty, exports also grew in December.
The PMI is positive of economic growth calculations for the fourth quarter "and points to good momentum heading into the New Year," BNZ's senior economist Doug Steel said.
"It suggests upside risk to the positive view we already have for manufacturing and near-term GDP growth forecasts," he added.
-Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
01-15-26 1721ET
