Manufacturing exporters already suffering under the high New Zealand dollar are likely to face a worsening situation later this year, an industry group says.
The New Zealand currency rose to US86.96 cents on Friday - the highest it has been since August 2011. On Saturday morning it was hovering around US86.5 cents.
Export New Zealand claims businesses have adjusted to the tough conditions but the Engineering, Printing and Manufacturing Union said tens of thousands of jobs have been lost in the last five years due to the high dollar.
Employers and Manufacturers Association chief executive Kim Campbell said while the dairy industry is insulated from currency shock because of high commodity prices, manufacturing exporters are struggling and are likely to face big problems later in the year.
"Even the ones who've made adjustments and invested in innovation and so on, when it gets to the levels we're talking about now (they) are finding it quite hard to know what to do."
Many hedging arrangements put in place to absorb currency fluctuations are set to run out in November, leaving exporters badly exposed, he said.
Council of Trade Unions economist Bill Rosenberg said the high dollar is forcing manufacturing exporters out of business and making the country too dependent on low-value-added commodity products.
"It's not as bad as it was half a century ago but it's heading in the wrong direction."
Mr Rosenberg said dairy and log exports are fetching high prices in China and those industries can cope with the high dollar, but manufacturing exporters are struggling.
He said the Government needs to look at direct support for exporters and put some controls on currency speculation.
But Mr Campbell said meddling with the exchange rate won't fix the economy and the focus should be on making the country more competitive and encouraging savings.
