Staffing issues constrain manufacturing, index shows

OTAGO and Southland’s manufacturing levels were flat in May, but the construction industry continued to report positive ongoing sales.

However, the now twoyearold issue of the lack of skilled and unskilled staff persists and employment continues to be a drag on businesses.

Nationally, the BNZBusinessNZ manufacturing index shrank 4.6 points from April to 54.4 for May, while Otago Southland improved 1.5 points to 58.6.

Scores above 50 reflect expansion and below, contraction.

Otago Southland Employers Association chief executive Virginia Nicholls said the south’s 58.6 score was just above last year’s average 57.1

‘‘The standout this month are the manufacturers supplying the construction industry, who are continuing to report positive ongoing sales,’’ Mrs Nicholls said.

The proportion of positive comments from Otago Southland was similar to last month, sitting at 71%.

She said the regional breakdown in each category showed expansion in all areas, except employment levels.

‘‘The commentary around employment levels suggests manufacturers are searching for new staff and are finding it difficult to get both skilled and unskilled staff,’’ Mrs Nicholls said.

OtagoSouthland’s production levels, new orders and deliveries of raw materials were all above 60 points and stocks of finished products were at 53.6, but employment levels were at 39.3.

The Otago Southland employment issue was similarly reflected in the national data, where employment was the only category in contraction, albeit just, at 49.8 points.

BusinessNZ’s executive director for manufacturing Catherine Beard said the national data for May showed ‘‘softened’’expansion, but the main result still ‘‘looked solid for now’’.

Although national employment dipped into contraction at 49.8, the other four categories remained in expansion.