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Proposed changes to immigration policy is also in the forefront of some employers’ minds.
Otago manufacturing in the BNZ-BusinessNZ index declined from 56.4 points in May to 54.8 in June, which was just up on the national 54.2 points, which has slipped two points since May.
Index points above 50 indicate expansion and below 50, contraction.
Otago Southland Employers’ Association chief executive Virginia Nicholls said the manufacturing activity in Otago and Southland for June "was a respectable 54.8 value points, which is holding steady".
"The [Otago Southland] regional breakdown in categories were all positive," she said.
In the sub-index, production stood at 59.4, deliveries at 56.3, employment and new orders at 53.1 and finished stocks at 50.
"New orders have been in expansion for the past two months, which is good news," Mrs Nicholls said.
However, as was the case several months ago, manufacturers were reporting concerns around availability of skilled staff.
"Skill shortages around our region have been challenging businesses for the past year to 18 months," she said.
Businesses were finding it challenging to attract skilled staff in Otago and Southland across a range of sectors, including tourism, construction, health care and related service industries.
Employers were now looking at strategies to bridge the skills gap of their existing employees by providing further training, Mrs Nicholls said.
Within the sectors there was a need for more engineers, construction managers, quantity surveyors, accountants and ICT workers, she said.
"The surge in construction around the region [also] means that it’s harder to get tradespeople, including builders, joiners and electricians," she said.
Also of concern were proposed changes to immigration policy and what that would mean for recruitment for some roles.
"In tourist towns such as Wanaka and Queenstown there’s concern with immigration policy changes that they won’t be able to recruit for the hospitality industry, including chefs, to do the jobs that New Zealanders are not available for," Mrs Nicholls said.
BusinessNZ executive director for manufacturing Catherine Beard said the past four months showed the sector was "hovering around" an expansion range between 56-58 points, which was "positive and healthy".
However, as in Otago Southland, the "weak spot" in the June "was arguably in its employment index", Mrs Beard said.
"Indeed, it slumped to 49.5 points, below the break-even mark of 50. However, it seems too early to judge this as a genuinely negative read," she said in a statement.
Mrs Nicholls said some southern exporting food manufacturers were reporting good product demand and others were busy with seasonal production.
Manufacturing for the construction sector, both residential and commercial, was busy, while aluminium boat manufacturers continued to have strong domestic sales and good export sales, Mrs Nicholls said.