Confidence among manufacturers and exporters is dropping, with some reporting a slowing in forward orders, a monthly survey shows.
The latest New Zealand Manufacturers and Exporters Association (NZMEA) survey of business conditions shows total sales in March were down 1.2 per cent on a year earlier.
Export saleswere down by 9 per cent, while domestic sales increased 5 per cent.
The survey sample covered operations with $374 million in annualised sales, with an export content of 40 per cent.
Net confidence dropped to -36, down from the -10 result reported the previous month.
The surveys are now being released by the NZMEA, having previously come out through the Canterbury Manufacturers' Association, after the scope of the exercise was broadened to include respondents throughout the country.
Chief executive John Walley said some respondents had reported that sales figures were holding up, but forward orders have slowed.
Domestic sales have also slowed from the previous month, although not as sharply as export sales, he said.
Availability of skilled staff remained a concern, as did exchange rates, although the fall of the New Zealand dollar against its Australian counterpart was providing some relief.
Significant lifts in the cost of materials, specially steel, were being reported, while other metal prices had also risen significantly, adding further pressure to margins.
"There are also worries around the breakdown of complex supply chains with the continued loss of activity offshore, and these factors have combined to push confidence levels down even further; a trend for most of this year," Walley said.
"The continued loss of top tier companies such as Fisher and Paykel is having an inevitable impact on what remains of the manufacturing sector, and some respondents report that the viability of their suppliers might be in doubt."
