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Manufacturing

New Zealand's manufacturing industries make an important contribution to the national economy. In the year ended September 2014, manufacturing sector output accounted for 11% of real GDP. The proportion of the labour force employed in manufacturing was around 12%. 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 $47.2 billion in the year ended September 2014, including $32.9 billion for dairy and meat products. Exports of dairy and meat products amounted to about $20.8 billion in the year ended November 2014.

Output in the manufacturing sector contracted sharply during the GFC, owing to weakening demand both domestically and globally. Manufacturing output recovered somewhat over late 2010 and early 2011, despite the Canterbury earthquakes, and continued to grow solidly in 2012. Negative growth was recorded in the first half of 2013 as a result of the elevated exchange rate affecting international competiveness and the impact of the late summer drought. Output grew strongly in the second half of 2013 as a recovery in agricultural production led to a rebound in food processing.

Manufacturing GDP fell over the first half of 2014, as dry conditions resurfaced in the North Island and a rise in the exchange rate put competitive pressure on exports, but output recovered later in the year as agricultural production recovered.

The following table sets out the sales of goods and services in the manufacturing sector for the five years ended 30 September 2014.

Table 10 - Operating Income of the Manufacturing Sector by Industry Group
Year ended 30 September
Industry Division
(dollar amounts in millions)
2010 2011 2012 2013 2014 2014
% of Total
Food
   Meat and Dairy 23,865 27,639 27,705 27,554 32,948 33.3%
   Other food, beverages and tobacco 13,158 13,341 13,671 14,223 14,334 14.5%
Machinery and equipment 8,671 9,616 9,612 9,349 9,805 9.9%
Metal product 8,823 9,319 9,249 8,993 9,229 9.3%
Chemical, polymer, and rubber product 6,796 7,344 7,896 8,392 8,835 8.9%
Petroleum and coal product 6,448 7,373 7,820 7,710 7,768 7.8%
Wood and paper product 7,499 7,423 7,306 7,289 7,521 7.6%
Non-Metallic mineral product 2,510 2,464 2,531 2,770 3,169 3.2%
Textile, leather, clothing and footwear 2,140 2,073 2,071 2,206 2,138 2.2%
Furniture and other manufacturing 1,665 1,621 1,523 1,539 1,652 1.7%
Printing 1,725 1,633 1,617 1,491 1,607 1.6%
Total 83,300 89,846 91,000 91,517 99,005 100.0%
Manufacturing index (1) 109 108 107 109 138

1) Base: June quarter 1996 = 100

Source: Statistics New Zealand

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