11 Oct 2012

Manufacturing orders fall as sector keeps shrinking

6:43 pm on 11 October 2012

Activity in the manufacturing sector has continued to shrink, though the pace of decline has eased.

The BNZ-Business New Zealand Performance of Manufacturing Index rose to 48.2 points in September, an increase of less than 1 point on the previous month and the lowest September month in four years.

A reading below 50 indicates the sector is contracting.

New orders fell to the lowest level in 3.5 years, and manufacturers say a lack of demand remains the main issue, which indicates production may ebb in coming months.

Manufacturing has been hard hit in recent times, due to a high New Zealand dollar and weak demand, but BNZ economists say talk of a crisis is overblown.

Business New Zealand's Catherine Beard says a lack of demand remains the main issue.

She says it's been lack lustre in the last two to three months, but elsewhere in the world none of the manufacturing indexes are doing that well.

The index cites the Institute of Economic Research's recent survey which shows manufacturers remain upbeat about their prospects.