10 Nov 2011

Manufacturing activity at lowest level since 2009

12:57 pm on 10 November 2011

Activity in the manufacturing sector has contracted sharply, plummeting to its lowest level in almost two-and-a-half years.

The BNZ-Business New Zealand Performance of Manufacturing Index fell 4 points to 46.5 in October.

A reading below 50 indicates the sector is contracting.

October's reading is the lowest since June 2009.

The sector last contracted in March after Christchurch's deadly earthquake.

Manufacturing New Zealand executive director Catherine Beard says it is hard to know if the result is a blip or if the sector is heading for ongoing slowdown.

She says a common theme was that the Rugby World Cup had a negative impact on some manufacturing.

"Everybody switched their attention to the games and if you were involved in anything that required sort of business as usual it wasn't really happening," she says.

Ms Beard says the exchange rate and high dollar was another recurring negative comment.

She say the building sector is still not firing and that is also affecting manufacturers.