SYDNEY (Reuters) -Manufacturing activity in New Zealand rose in July, returning to levels of expansion seen during early 2025 after new orders and production metrics hit the highest level in three years, a survey showed on Friday.

The Bank of New Zealand-Business NZ's seasonally adjusted Performance of Manufacturing Index (PMI) increased to 52.8 in July from a revised 49.2 in June. The new orders index rose to 54.2 from a revised 51.8 in the prior month.

A reading above 50 indicates manufacturing activity is expanding, while anything below that threshold points to contraction.

"Given the prevailing headwinds it is, perhaps, even more encouraging that the PMI has moved back into expansion. It will need to be sustained or nudge a bit higher to be consistent with our economic forecasts," BNZ senior economist Doug Steel said.

(Reporting by Renju Jose in Sydney;)