KEY POINTS:
Local manufacturing activity has plunged to another record low, according to new research published this morning.
The Bank of New Zealand - Business NZ Performance of Manufacturing Index (PMI) for November shows a fall from the month before and a big plunge from the same month last year.
The latest result was also the seventh consecutive month in which the sector has been in decline.
A PMI reading above 50 indicates that manufacturing is generally expanding; below 50 that it is declining.
Between 2002 and 2007, the November number ranged between 44.3 and 57.9. For last month the number stood at 35.4 - down 21 points from last year and 7.9 from October.
"The global manufacturing depression has well and truly hit New Zealand shores and with the global PMI currently standing at 36.4, New Zealand is in good company with other developed economies," said Business NZ chief executive Phil O'Reilly in a statement issued with the research.
"Any sign of a sizeable lift in activity is against the odds in the coming months. The very poor November result also begs the question - just low will overall activity fall? There's no clear indication we have yet reached the lowest point for this cycle."
O'Reilly said it was difficult to "spot positives" but he hoped New Zealand's falling exchange rate would provide some competitive boost for those still attaining work on the international market. Recent interest rate cuts may also provide cost of borrowing relief in some quarters - if lines to credit were still available.
"It's tough going for many manufacturers at present, but we should also be mindful of those who are still finding positives in the market and increasing sales by establishing new markets and diversifying their product range."
Head of research at survey co-sponsor, the BNZ, Stephen Toplis, said manufacturers were being "battered on all fronts".
"First, they were beaten up by the rapid softening in domestic demand, led by the housing market correction. Now they're also suffering from phase two of the recession, which involves a drop in demand for export product as recession grips the developed world.
"We remain hopeful that 2010 will be a much better year, as the combined impact of substantial monetary and fiscal easing eventually pushes the economy ahead but for many, between now and then will simply be a fight for survival."
