New survey results suggest New Zealand's household and business sectors will continue to suffer from the global credit crisis.
A manufacturing survey shows activity levels in the sector in October fell to their lowest levels since 2002.
And retail sales fell 0.9% in the three months to the end of September. Sales have now fallen for three consecutive quarters, with a 3.1% fall in motor vehicle sales the largest contributor to the decline.
However, rising prices meant the total amount spent on retail purchases was only slightly down (0.2%) on the previous quarter.
Supermarket and fuel prices were the largest contributor to the price increases during the September quarter.
Manufacturing sector slows
The BNZ Business New Zealand's monthly manufacturing survey shows employment intentions fell for the ninth consecutive month.
Gains from a fall in the value of the New Zealand dollar were consumed by falling demand.
BNZ economists say this mirrors a slowdown in manufacturing around the world, and is a sign of worse to come for the New Zealand economy.
Manufacturing activity is at its lowest since at least 2002, with the monthly Performance of Manufacturing Index showing the sector contracted for its sixth month in a row in October.
Northern manufacturers say their members rely more on local sales, and this showed up in weaker activity for them compared with their southern counterparts.
The Canterbury Employers Chamber of Commerce chief executive, Peter Townshend, says the need for sheds and equipment to supply the dairy export boom has underpinned a strong period of activity for South Island manufacturers.
However, he says the fall in commodity prices means this will inevitably slow down, and they are setting new priorities.
