WELLINGTON (Reuters) - Manufacturing activity in New Zealand grew at its slowest pace in five years in December, a survey showed on Friday.
The Bank of New Zealand-Business NZ's seasonally adjusted Performance of Manufacturing Index (PMI) fell to 51.2 from 57.7 the previous month.
A reading above 50 indicates an expansion in activity, while anything below that threshold indicates a contraction.
The New Zealand dollar <NZD=D4> fell to $0.7286 after the release of the survey, from around $0.7305.
The stark slowdown in growth was largely due to a hangover from a turbulent election that saw the new Labour-led government take the helm in October.
The surprise result ended almost a decade of centre-right National rule and generated uncertainty as to what policies the centre-left government would implement, particularly around foreign investment and migration.
"Anecdotal evidence, across the economy, suggests there was a post-election hiccup in activity as businesses put off major spending...until there was greater clarity and, more importantly, understanding of likely policy shifts," said Stephen Topliss, head of research at BNZ Bank.
(Reporting by Charlotte Greenfield; editing by Mark Heinrich)
