Productive Southland, Otago firms buck trend

The Southland and Otago manufacturing sectors were the most productive in the country in December, bucking the slowing trend experienced elsewhere in New Zealand.

The region’s manufacturers performed nine points better in December last year than December 2018, according to the latest BNZ BusinessNZ Performance of Manufacturing Index (PMI).

The PMI score jumped from 47.9 points to the 56.9 points recorded last month.

Otago Southland Employers’ Association chief executive Virginia Nicholls said businesses experienced a busy Christmas for food and beverage sales, while the construction and machinery manufacturing sectors had an industrious year.

The PMI is based on surveys conducted with owners of manufacturing businesses throughout the country. Along with measuring their success, it also identifies challenges in the sector.

A major concern for businesses in the Southland and Otago regions, however, was a low candidate pool for new employees – especially construction-related tradespeople, Nicholls said.

‘‘This has been an issue for the past couple of years,’’ she said, ‘‘and as unemployment is so low, this continues to be a significant concern to businesses who need more staff.’’

Southland businesses raised concerns about the long-term viability of the Tiwai Point aluminium smelter and the effect that its potential closure would have on the community.

A closure would effect the employees, contractors and associated industries that supply the smelter, Nicholls said.

Manufacturing businesses were also worried about health and safety implications if recreational-use cannabis was to be legalised later in the year.

New Zealanders will vote on legislation at the next election, but Nicholls said Southland and Otago business owners felt that better testing processes were needed.

‘‘Businesses have the ability to test and immediately measure the alcohol level, and whether the user is impaired at the time of the test,’’ Nicholls said.

She said a failed drug test didn’t indicate whether an employee was intoxicated at the time.

‘‘More needs to be done to get a test that can be used in workplaces,’’ she said.

Nationally, New Zealand’s manufacturing sector was three points less productive last year than in 2018 – which was already three points lower than 2017.

‘‘While the first half of the year managed to just keep its head above water, the second half saw four of the six months in contraction,’’ ManufacturingNZ executive director Catherine Beard said. ‘‘At this stage there is not much evidence to suggest the first half of 2020 will see a noticeable improvement.’’

‘‘More needs to be done to get a [drug] test that can be used in workplaces.’’

Virginia Nicholls (above) Otago Southland Employers’ Association chief executive