South’s manufacturing level highest in NZ

Virginia Nicholls
Virginia Nicholls
Manufacturing in Otago and Southland in September was buoyed by the construction sector, hitting its highest index level for the year.

Otago Southland topped the country, the only area in firm expansion above 60 points. The upper North Island on 53.5, lower North island 50.1 and upper South Island on 53.2. In the monthly BNZ-Business New Zealand performance of manufacturing index, the South rose from 50 points in August to 60.3, just shy of the 61.7 points attained in September last year.

Points above 50 denote expansion, and below, contraction.

Otago Southland Employers’ Association chief executive Virginia Nicholls said manufacturing in the region was busy, which was reflected by the proportion of positive comments sitting at a high of 85%.

"Construction is busy, and we’d like to see promising migrants being able to extend their essential skills visa to four years, which would cover their apprenticeship," she said.

Other surveys have shown southern business confidence levels as low, as they are across the country, but regional and household surveys during the past month showed high confidence levels across both Otago and Southland.

BusinessNZ’s executive director for manufacturing Catherine Beard said the September results confirmed manufacturing was "currently stuck in low expansion mode". The proportion of positive comments nationally, 53.4%, remained weak, and those outlining negative influences typically focused on further falls in customer demand, both domestically and offshore, as well as comments centred on a general slowdown, she said.

Mrs Nicholls said southern regional breakdown in categories showed all were in expansion mode, with deliveries of raw materials sitting above 60 points, employment and new orders at 60, and production levels and stocks of finished products at 56.7.

"There’s been a number of significant investments in dairy manufacturing plants in Southland, and they’re busy supplying international markets," she said.

Lack of staff — from unskilled through to professionals — has been a persistent issue for more than two years.

Mrs Nicholls said the Government review of the recognised seasonal employer (RSE) scheme in 2019 was being welcomed by businesses. Central Otago had started the very successful scheme 12 years ago with significant success for both the Pacific Island communities and the horticulturists, she said.

"We’d like there to be consideration of expanding the scheme, to take into account other industries suffering from labour and skill shortages," Mrs Nicholls said.

Earlier this week the  Government announced it was committed to raising New Zealand’s research and development expenditure to 2% of GDP over 10 years, supported by a tax incentive for businesses.

Mrs Nicholls said the research and development tax incentive had been positively received by the survey respondents.

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