Otago Southland’s manufacturing index for August dipped from 49.8 points in July to 48.8 for August, while nationally the index fell 0.4 to 55.1.
Points above 50 denote expansion, and below, contraction.
Chief executive of the Otago Southland Employers’ Association Virginia Nicholls said employment levels and new orders had been positive for much of the year, but during August there was a decline to 46.4.
Otago Southland was 38.3 points in June then gained to 49.8 in July before slipping.
She said the sub-indices of production and finished stock were steady at 50, and deliveries were positive at 53.6.
"As this is only the second time this year that we have experienced a decline, we need to treat this result with caution," she said.
However, she noted manufacturers exporting to Australia were finding the strengthening exchange rate continuing to have a negative effect on their sales.
In the South, wood and paper manufacturers supplying the construction industry were still experiencing positive sales, she said.
"The metal product manufacturers are now lifting their output for the summer season with good forward orders for the New Zealand market along with strong export sales," Mrs Nicholls said.
BusinessNZ’s executive director for manufacturing Catherine Beard said the national 55.1 still represented healthy growth for manufacturing in New Zealand, despite the slight fall.
"The sector remains solidly in expansion in almost all months since October 2012," she said.
The five national sub-indices showed varied movements in activity, with employment at 47.4, the biggest hit after four consecutive increases.
Production at 55.7 had slipped slightly, although new orders at 59.1 remained strong, she said.
BNZ Senior Economist, Craig Ebert said although the seasonally adjusted August result eased to 55.1, this was trivial statistically, with the index above its long-term average of 53.1.
