Manufacturing in New Zealand contracted for a third month in September amid weak domestic orders and a rising currency, a private survey showed.
Bloomberg reported the New Zealand dollar’s gain of 5 percent this year makes it the best-performing Group of 10 currency and has made it difficult for manufactures to compete, most recently seen with manufacturers such as Norske Skog, which reduced production and cut jobs – making the decision to invest heavily in Australia and downsize New Zealand operations.
The BNZ– Business New Zealand Performance of Manufacturing Index remained in contraction during September, at 48.2 points.
Stuff reported BusinessNZ’s executive director for manufacturing Catherine Beard said there had been a continued drop in new orders, reaching its lowest point in more than three years, believing this may have an adverse effect on production numbers in the months ahead.
Prime Minister John Key has dismissed calls from his political opponents to weaken the currency and help struggling businesses.
“Talk that the industry is in crisis is overblown,” Craig Ebert, senior economist at Bank of New Zealand in Wellington, said in the report. “While the data are worryingly weak, they are about current conditions rather than the way ahead. Expectations for output over the next three months remain positive.” (Bloomberg)