Otago-Southland Employers Association chief executive John Scandrett told the Otago Daily Times that for the sixth month in a row, the region had topped the national manufacturing index.
"But at the same time, we need to recognise that we've delivered our lowest local survey result since July last year."
The Otago-Southland January PMI was 52.8 points, marginally in expansionary mode. That was good but when it was aligned with last December's 65.6 points and November's "robust" 71 result, it showed some slippage across the sector, he said.
Canterbury-Westland was the next highest reading at 51.3, followed by central at 45.9 and northern at 43. The national seasonally-adjusted PMI was 50.5.
Mr Scandrett said that manufacturing activity in the region underpinned a great deal of what was happening in the all-important export arena. Within the January PMI, the positive survey feedback from operators in the food and machinery/equipment export sectors was heartening.
"Unfortunately, on the flip-side of the survey outcomes, there are again negative references to sluggish activity across wood, paper products and some packaging sub-sectors."
In an ideal world, Otago-Southland manufacturers would like to be consistently positioned within a strong expansionary band of between 65 and 75 points, he said. But across the current economic landscape, the region should be satisfied to have a "manufacturing nose" above the break-even 50-point mark.
BNZ economist Doug Steel said the national mark of 50.5 was not a strong result but it was on the right side of the line, indicating expansion.
Importantly, the index held on to the majority of the bounce from November's 46.5, although it was slightly down on December's 51.6.
"In this respect, it largely solidifies December's improvement, enough to maintain our mildly positive trend view on the manufacturing sector and the economy more generally."
