Interior view of a warehouse with racks, pallets, goods, forklifts. Photo: 123RF
New Zealand's small and medium sized manufacturers aggressively shifted stock in the third quarter of 2024, leaving warehouses sparse and sales flat in the final quarter, a report says.
Unleashed's Manufacturing Health Index report found New Zealand manufacturers were focused on maintaining profitability in hand with austere stock control, against a backdrop of a stubborn recession and the threat of tariffs on international trade.
"As a general rule, small to medium sized Kiwi manufacturers are focused on creating high quality, niche products for global industries, so they're especially vulnerable to major shifts that would impact international trade," Unleashed's Jarrod Adam said.
"If you're a kiwi manufacturer who sells your goods overseas, you don't want to get caught with your pants down in a tariff storm, which is why I think we're seeing a big drop in the amount of inventory on hand."
The report indicated overall manufacturing sales revenues were down 35 percent in Q4 to $171,863 per firm on average, compared with the year earlier's $263,256, following a trend seen in Australia and Britain.
"While the Q4 dip followed the same trend as the Australian and UK sectors, NZ businesses had a uniquely difficult time over 2024 as a whole, selling $837,566 worth of goods on average in the calendar year, down 16 percent on 2023," Adam said.
The report indicated the only bright spot in the sector came from clothing, footwear and accessories, which saw a 28 percent pickup in sales in Q4, while purchase orders rose to 253, up 18 from the previous quarter.
Otherwise, purchase orders numbers shrank by 31 percent in Q4 other than energy and chemicals, which saw a 8.5 percent drop.
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