Manufacturing activity has contracted for the 11th consecutive month, the latest survey has revealed.
The BNZ Capital-Business New Zealand Performance of Manufacturing Index was a seasonally-adjusted 40.7 in March.
A reading below 50 indicates activity is shrinking.
BNZ Capital senior economist Craig Ebert says the sector is struggling on several fronts, including activity, profits and employment reductions.
Mr Ebert says inventories are becoming a problem and will need to be wound back.
He says the problems in the manufacturing sector are as much to do with domestic slowdown as the global downturn, and he does not expect any let up for manufacturers in the coming months.