The differing fortunes of the Otago-Southland manufacturing and services industries have been revealed in the latest surveys released by Business New Zealand.
Southern manufacturers led New Zealand as last year drew to a close, with a performance in manufacturing index (PMI) reading of 60.9 points.
Otago-Southland Employers Association chief executive Duncan Simpson said that although the December reading was down from the November reading of 70.2 points, it was still well ahead of the national December figure of 53.8 points.
However, the performance of services index (PSI) reading of 44.7 points was down from the November result of 62 points. An index reading above 50 indicates expansion while below 50 indicates a decline.
‘‘On the face of it, a significant drop-off in activity has occurred,'' Mr Simpson said.
Because 2007 was the first Christmas period involved in the survey it would be wrong to read too much into the result. Annual leave and annual shutdown periods had some effect.
The PSI covered the wholesale trade, transport and storage, accommodation, cafes and restaurants and property and business services.
‘‘In the November survey, we reported a good level of forward orders and contracts in Otago and Southland, so hopefully these will be reflected in an uplift in activity levels now the holiday period is behind us,'' he said.
Nationally, the PSI was 53.9 in December, down 8.7 points from November. Comments received from businesses were heavily dominated by the Christmas holiday period which proved to be one of contrasts.
Some service providers shut down over the period while others found it their most profitable time.
Asked about the mood of manufacturers in the region, Mr Simpson said the industry had sustained its optimism at the end of the year. Concern about the dollar was less in December, indicating that people were living with the high value or had given up complaining.
The December results for new orders and raw material deliveries indicated that 2008 should start on a positive note.
‘‘On balance, Otago and Southland manufacturers are positive about current business
conditions,with the main areas of concern being the tight labour situation and increased costs in general.''
The tight employment market was showing signs of easing in the region. Some job losses in manufacturing had caused barely a ripple as the redundant workers had had no trouble picking up new positions, he said.
That had spread right down to Invercargill where skilled workers from Dunedin had been lured south, easing what had been a tight market. A weaker global economy might cause issues for manufacturers this year, especially if they had a strong export focus.
‘‘At an international level, it's pleasing to see New Zealand sitting comparatively well in its level of activity in relation to other countries,'' Mr Simpson said.
