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Manufacturing

New Zealand's manufacturing industries make an important contribution to the national economy. In the year ended September 2009, manufacturing sector output accounted for 12.4% of real GDP. The proportion of the labour force employed in manufacturing was also 12.4%. Primary sector processing (food and forestry) makes up a significant proportion of the sector.

The food manufacturing industry produces high-quality products for both the domestic and export market. This industry enjoys the advantages of a natural environment that is highly conducive to pastoral agriculture, an absence of major agricultural diseases, the potential for year-round production and an international reputation for excellence. The industry had sales of over $38 billion in the year ended September 2009, including more than $26 billion for meat and dairy products. Exports of meat and dairy products amounted to $14 billion over the same period.

Manufacturing growth peaked at 9.5% on an annual average basis in June 2003 before trending downward over the following four years as the value of the New Zealand dollar appreciated. By September 2008, output in the manufacturing sector was already in decline, leaving it vulnerable to further contraction as prospects for the global economy deteriorated rapidly with the onset of the global financial crisis. The impact of weaker global demand and uncertainty over future global economic conditions flowed through to the manufacturing sector, with output shrinking 11.2% on an average annual basis in the year to September 2009. More recent indicators suggest expansion is now likely over coming quarters.

The following table sets out the sales of goods and services in the manufacturing sector for the five years ended 30 September 2009.

Operating Income of the Manufacturing Sector by Industry Group
(dollar amounts in millions)
Year ended 30 September
Industry Division 2005 2006 2007 2008 2009 2009
% of Total
Food
   Meat and Dairy 17,029 19,054 19,839 24,369 25,624 32.1%
   Other food, beverages and tobacco 9,997 10,932 11,181 12,507 12,711 15.9%
Petroleum, coal and chemical products 7,969 7,694 7,819 8,166 7,728 9.7%
Metal products 7,329 7,517 7,922 8,410 7,438 9.3%
Machinery and equipment 6,732 7,003 7,032 7,573 6,921 8.7%
Wood and paper products 7,136 7,280 7,640 7,468 6,874 8.6%
Printing, publishing and recorded media 3,772 3,808 3,803 3,836 3,497 4.4%
Non metallic mineral products 2,571 2,634 2,820 2,945 2,670 3.3%
Transport equipment 2,420 2,273 2,505 2,902 2,465 3.1%
Textile and apparel 2,597 2,472 2,472 2,287 2,040 2.6%
Furniture and other manufacturing 2,112 2,117 2,105 1,980 1,797 2.3%
TOTAL 69,664 72,784 75,137 82,443 79,766 100.0%
Manufacturing index (1) 123 119 115 116 103  

(1) Base: June quarter 1996 = 100.

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