Manufacturers making strides locally

Manufacturing sales in May were up strongly, thanks to continued strength in the domestic market offsetting weak exports.

This is according to a survey released yesterday by the Canterbury Manufacturers' Association.

The survey - mainly of the metals sector in Canterbury - found manufacturing sales in May were up 7 per cent on the year before.

Domestic sales rose 21 per cent from the same time last year to $224 million, largely due to spending by state-owned enterprises on staff and roading, said CMA chief executive John Walley.

Business confidence continued to fall due to numbers of skilled staff dropping, an increase in the cost of raw materials, and increased competition from overseas.

"There are companies who have already decided to relocate offshore to take advantage of lower production costs rather than wait any longer for favourable trading conditions to return to New Zealand," said Walley.

Export sales fell by 2 per cent to $286 million.

"Returns are improving on export sales but sales are still falling.

"A declining exchange rate is only part of the story as it takes time to recover lost markets."

Manufacturing industry statistics for year to May:

* Total sales up 7 per cent.

* Domestic sales up 21 per cent.

* Export sales down 2 per cent.

* Staff numbers down 12 per cent