What lies ahead: Manufacturing

Manufacturers are approaching the new year with "cautious optimism", says the Employers and Manufacturers Association, Northern.

But manufacturing services manager Bruce Goldsworthy said the sector's hopes were hinged on the dollar.

"If the dollar starts to trend back down, the optimism will grow," he said.

ANZ Bank chief economist John Bolsover said the strong kiwi had been the biggest influence on the manufacturing sector this year and the cross rate with Australia would continue to be a concern if it remained above 90Ac.

"Psychologically, that level seems to raise alarm bells."

However, the sector had shown some resistance to the high dollar this year, recording average value-added growth levels of 2.6 per cent for the year to June - compared with 4.4 per cent for the economy as a whole.

"The sector's shown its ability to weather adverse movements in currency, and as long as currency movements remain reasonable in the short term, it's in a position to weather it," said Bolsover.

"Expect continued growth next year, but don't expect the sector to outperform the general economy."

Goldsworthy said a shortage of skilled labour had made life more difficult than manufacturers would have liked in the past year. Rising costs of hard commodities such as energy prices and property had also been working against them.

Beyond these continuing, he did not see any serious risks in the year ahead.

"I don't think a change in government next year will make a big difference."

And as far as the effect free-trade agreements in Asia would have? "I don't think free-trade agreements are going to result in a huge wave of manufactured product. Tariffs are not at a level where there's a real flood of them."