The country's manufacturing sector has fallen into contraction, with Covid-19 absenteeism taking a major toll on output.
New Zealand's industrial base suffering due to Covid-19 and other issues. Photo: 123rf.com
The BNZ-Business New Zealand Performance of Manufacturing Index for June, fell 2.9 points to 49.7.
A reading below 50 indicated manufacturing is declining.
It was the first time the sector has entered contraction since the August 2021 lockdown, with the sub-measures of production and new orders declining.
BNZ senior economist Doug Steel said manufacturing had been hit hard by a combination of factors, adding to the Covid woes.
"Some of them are broader than manufacturing of course. But the likes of absenteeism is I think a big one this time around.
"Many of the respondents to our survey are saying that their staff have been away, whether it's because they have Covid or other winter illnesses ... that has dented productivity according to our respondents," Steel said.
He said demand has also decreased within the sector, with manufacturers reporting a fall in new orders.
"That's sort of continued a trend over recent months where they were still growing but at a slower rate. This time around they've actually dipped into negative territory so that's a little bit concerning for what might be ahead."
Steel expected a solid bounce in economic growth for the three months ended June, although the weak manufacturing numbers may take some gloss off the quarter.