The country’s manufacturing sector has fallen into contraction, with Covid-19 absenteeism taking a major toll on output.
New Zealand’s industrial base suffering due to Covid-19 and other issues. Photo: 123rf.com
The BNZ-Business New Zealand Performance of Manufacturing Index for June, fell 2.9 points to 49.7.
A reading below 50 indicated manufacturing is declining.
It was the first time the sector has entered contraction since the August 2021 lockdown, with the sub-measures of production and new orders declining.
BNZ senior economist Doug Steel said manufacturing had been hit hard by a combination of factors, adding to the Covid woes.
“Some of them are broader than manufacturing of course. But the likes of absenteeism is I think a big one this time around.
“Many of the respondents to our survey are saying that their staff have been away, whether it’s because they have Covid or other winter illnesses … that has dented productivity according to our respondents,” Steel said.
He said demand has also decreased within the sector, with manufacturers reporting a fall in new orders.
“That’s sort of continued a trend over recent months where they were still growing but at a slower rate. This time around they’ve actually dipped into negative territory so that’s a little bit concerning for what might be ahead.”
Steel expected a solid bounce in economic growth for the three months ended June, although the weak manufacturing numbers may take some gloss off the quarter.
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