New Zealand manufacturing activity bounced slightly in July, but is continuing to contract, according the BNZ-Business NZ Performance of Manufacturing Index. "New Zealand's manufacturing sector made a slight comeback in July, but activity levels are still contracting," BNZ and Business New Zealand said. The seasonally adjusted PMI index rose to 48.8 from 45.3 in June, but remains below the 50 threshold indicating expansion. Business NZ chief executive Phil O'Reilly said the part recovery in the seasonally adjusted result was encouraging, given the significant fall in June. However, the sector remained soft, echoing the general downturn throughout the economy.And Bank of New Zealand economists said although several factors, such as the declining exchange rate, were riding to the rescue of New Zealand's manufacturing sector, many more existing and emerging "issues" were weighing against its immediate relief. These included the fact local business investment was looking a bit shaky, the construction sector here and overseas was tracking weakly and consumer spending on big ticket items was drying up. The full details of the PMI are available here.