Manufacturers are feeling much more upbeat, but the high exchange rate continues to be a significant headwind for the sector.
The latest survey of business conditions by the Manufacturers & Exporters Association shows net confidence rose to 33 points in May, the first month that the indicator has been in positive territory this year.
In April, it stood at a net -9 points.
Total sales in May increased nearly 1.1%, compared with the same month last year, with export sales rising, but domestic ones falling.
The current performance index, which combines profitability and cash flow, is at 104, up from 101 in April.
A figure above 100 indicates expansion.
Association chief executive John Walley says there is some concern about the rise of the New Zealand dollar against the Australian dollar, but the movement may not be that negative.
"It's certainly worse than it's been," he says, "but the Australian cross (rate) is still close to its longer than average, so for anyone facing structural business into Australia it's not so bad."
