A resurgence in manufacturing activity has yet to flow through to more jobs in the sector.
The BNZ-Business New Zealand survey for March shows firms were their most buoyant in nearly two-and-a-half years, showing the idex gained 2.7 points to 56.3.
A reading about 50 indicates manufacturing is expanding and the index is now at its highest level in 28 months.
Strong demand from Australia is keeping production lines busy, and new orders rolling in.
But Business New Zealand's executive director of manufacturing says firms are not yet confident enough to take on workers.
Catherine Beard says increased demand is being met from spare capacity within firms and existing workers.
Manufacturing and Exporters Association chief executive John Walley says the sector is still vulnerable to a higher dollar.
The New Zealand dollar is 25% higher against trading partners currencies on a year ago, despite being at a decade-low against the Australian dollar.
Mr Walley has called on the Reserve Bank of New Zealand to keep interest rates low and help take pressure off the currency.
BNZ senior economist Craig Ebert says a recovery trend that has been under way since the middle of last year appears to have accelerated.
