Business New Zealand says a pick-up in manufacturing activity in December does not represent a turnaround for the sector.
According to a monthly survey by the BNZ and Business New Zealand manufacturing activity increased from an all-time low in November but was still the second-worst in the history of the survey.
Business New Zealand says the fall in both the dollar and in interest rates gave some breathing space to manufacturers last month.
But Radio New Zealand's economics correspondent says rapidly accumulating inventories of manufactured goods coupled with falling demand are set to overwhelm these positives.
According to the most recent government figures, more than 7000 manufacturing jobs were lost between March - September last year.
Although the December survey shows manufacturers' employment intentions improved for the first time since March, economists are betting there are more job losses to come.