Otago and Southland manufacturers appear to be faring a little better than those in other areas of New Zealand.
The BNZ Capital-Business New Zealand performance of manufacturing index (PMI), released yesterday, slumped to its second-lowest level since it started in August 2002 and the ninth consecutive monthly decline.
While Otago-Southland manufacturers followed the rest of the country with declining activity, they performed better than any other region.
A PMI reading above 50 indicates business is growing and below 50 that it is contracting.
The national PMI for January was 42, down 0.5 on December.
The Otago-Southland PMI was 48.4, down from 51.1 in December and 58.8 in January 2008, while last month the Northern region, with 34.4, and Canterbury-Westland, with 36.8, recorded their worst results.
Otago Southland Employers Association chief executive Duncan Simpson said manufacturing activity was patchy in the region, but the food and beverage and related sectors appeared to be holding up.
"The national trend does not signal a tidal wave rolling from the north to south," he said.
Traditionally, Otago and Southland had not followed the survey trends, because of the mix of businesses, he said.
Conditions for manufacturers were worse further north and he was particularly concerned at the poor performance in Canterbury-Westland.
"They were always a bellwether region.
''When the recovery started, it started there and when there was a contraction, it started there."
Mr Simpson said some southern exporters had told him things were looking brighter now than before Christmas.
Some companies were securing new orders.
"It is not a sign of recovery but they are looking at different markets."
The low exchange rate was also helping to make exported products more affordable, while also increasing the amount of New Zealand dollars repatriated.
Local companies supplying the Australian car-manufacturing industry, or with a reliance on the United States, were finding the going tough.
But if firms could survive, they would be able to capitalise from the economic recovery.
Business New Zealand chief executive Phil O'Reilly said the survey result was not a surprise given other weak economic surveys, but the lack of ongoing orders was a real concern.
He hoped the low exchange rate would boost export orders.
