Manufacturing in Otago and Southland during January has
slipped into slight contraction, after leading the country's
four regions for two months, while the rebuilding of
Christchurch appears to be gathering impetus.
About 200 manufacturing jobs remain at threat around Otago
and the stubbornly strong New Zealand dollar - the export
sector's Achilles heel - hit a record high against the
British pound yesterday.
In the monthly BNZ-Business New Zealand performance of
manufacturing index, a reading above 50 indicates expansion,
and below, contraction.
Nationally, the manufacturing index rose to 55.2. All but one
of the five sub-indices reflected expansion. Otago Southland
plunged from 60 in December to 48.1. The national employment
sub-index declined to contraction at 48.4.
The other three regions all gained, headed by Canterbury
Westland rising to 54.9, northern North Island to 50.7 and
southern North Island 49.9.
BusinessNZ executive director for manufacturing Catherine
Beard said while the January result was ''heartening, it was
still too early to predict whether 2013 would be a better
year for manufacturers than 2012.
Otago Southland Employers Association chief executive, John
Scandrett, said the negative feedback from January was based
on sluggish outcomes in metal product, paper and machinery
activities and reference ''to the impact a fragile retail
scene can exert on our manufacturing performance''.
While it has no immediate bearing on the manufacturing index,
during the past month almost 200 mill workers in Oamaru were
made redundant, and Dunedin-based Farra engineering is in
consultation with fabrication staff, and could possibly shed
Mr Scandrett said yesterday that general job losses in
manufacturing were reflected in the employment index, which
has remained in contraction for eight consecutive months.
''However, what we are seeing with the broader results is
that job losses do not equate with overall declines in
activity, as three of the last four months have shown growth
in the sector,'' he said.
There was also a healthy lift in new orders for January,
along with continued recovery work in the Canterbury region,
which should assist production levels in the months ahead, Mr
The New Zealand dollar remains persistently strong against
the Australian and United States counterparts, hurting any
exporters, and yesterday the kiwi hit a high against the
British pound, at 54p.
Mr Scandrett said the ''currency situation'' of the strong
kiwi continued to buffet exporters and was likely to continue
that way for some time.
Despite the Otago Southland dip from December, Mr Scandrett
said the recent survey comments were mixed and there was
still strength around the new orders, finished stock and
''We can also identify positive sentiment flowing within key
sub-sector activity areas, especially food and beverage, wood
products, boat building and selected textile operations,'' he
BNZ economist Doug Steel said, `While positivity seems to be
increasing among those associated with the much-anticipated
lift in domestic construction activity, there was growing
anxiety among those that supply the slowing Australian