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Manufacturing

New Zealand's manufacturing industries make an important contribution to the national economy. In the year ended September 2013, manufacturing sector output accounted for 13.3% of real GDP. The proportion of the labour force employed in manufacturing was around 11%. 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 $41.7 billion in the year ended September 2013, including more than $27 billion for meat and dairy products. Exports of meat and dairy products amounted to about $16.7 billion in the year ended September 2013.

Output in the manufacturing sector declined throughout most of 2006 and 2007, leaving it vulnerable to further contraction as prospects for the global economy deteriorated rapidly with the onset of the GFC in late 2008. The impact of weaker global demand and uncertainty over future global economic conditions flowed through to the manufacturing sector, with output shrinking 12.9% on an average annual basis in the year to September 2009.

Manufacturing recovered somewhat over late 2010 and early 2011, despite the Canterbury earthquakes. After a 3.5% contraction in the December 2011 quarter, manufacturing output bounced back in the March quarter of 2012, rising 2.5%. The bounce back was attributed to good farming conditions which provided a boost to food processing. Output continued to grow in 2012 to be up 3.9% in the December year. Negative growth was recorded in the first half of 2013 as a result of an elevated exchange rate affecting international competitiveness and the impact of the drought on dairy processing, but output grew 1.5% in the September quarter as the industry rebounded from the summer drought.

The following table sets out the sales of goods and services in the manufacturing sector for the five years ended 30 September 2013.

Table 9 - Operating Income of the Manufacturing Sector by Industry Group
Year ended 30 September
Industry Division
(dollar amounts in millions)
2009 2010 2011 2012 2013 2013
% of Total
Food            
    Meat and dairy 25,503 23,865 27,639 27,705 27,554 30.1
    Other food, beverages and tobacco 13,083 13,158 13,341 13,671 14,194 15.5
Machinery and equipment 8,859 8,671 9,616 9,612 9,349 10.2
Metal product 9,007 8,823 9,319 9,249 8,993 9.8
Chemical, polymer, and rubber product 7,063 6,796 7,344 7,896 8,392 9.2
Petroleum and coal product 6,345 6,448 7,373 7,820 7,710 8.4
Wood and paper product 7,102 7,499 7,423 7,306 7,289 8.0
Non-Metallic mineral product 2,698 2,510 2,464 2,531 2,770 3.0
Textile, leather, clothing and footwear 2,230 2,140 2,073 2,071 2,206 2.4
Furniture and other manufacturing 1,687 1,665 1,621 1,523 1,539 1.7
Printing 1,713 1,725 1,633 1,617 1,491 1.6
Total 85,289 83,300 89,846 91,000 91,487 100.0
Manufacturing index1 103 113 114 116 118  
  1. Base: June quarter 1996 = 100.

Source: Statistics New Zealand

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