2008 has not been a good year for manufacturing in New Zealand. For nine months of the year manufacturing activity was in contraction. And for eight months there were consecutive PMI values below 50.

Of the five sub-indices measured, four recorded a value below 50. However, all have improved from the lows seen in November.

Leading the weakening was production with a value of 39.9. This is an improvement from the record low seen in November of 29.1, but is far from the 53.3 recorded in December 2007.

Employment has recorded values below 50 since January 2008; but, with a value of 41.9 for the December month this is the lowest value recorded in 2008. This indicates more job losses may occur in this sector as firms decrease the number of shifts they operate or close down their operations.

New orders (42.2) returned to levels similar to those seen in October, after dropping to a record low in November of 34.8. Comparing year on year, the drop in new orders can be clearly seen as this index recorded a value of 55.1 in December 2007.

Finished stock (50.5) was the only index to show expansion, having recorded values of 47.5 and 48.0 respectively in November and October.

The Central and Northern regions remained below 50, with the Northern region showing a very weak result at 34.4. In the South Island, Otago/Southland (51.1) remained in positive territory while the Canterbury/Westland region (49.4) improved from November 2008 but was not as strong as results in October.