According to the BNZ-BusinessNZ performance of manufacturing index, released yesterday, Otago-Southland manufacturing stood at 45.8 points, remaining in a contraction band that has characterised each of the past six months.
Points above 50 reflect expansion, but below 50 is contraction.
Otago Southland Employers' Association chief executive John Scandrett said that for each of the three months to July, the regional index figures had shown manufacturing activity levels across Otago and Southland were "remaining flat".
"The reality is that we have, at times, come close to crossing into expansionary territory but, as with most of the other regional results, haven't gathered enough momentum to confidently say that, overall, we're gaining ground," he said.
Nationally, the seasonally adjusted index fell from 50 in June to 49.4 in July, the lowest result for that month since 2008.
Business New Zealand's executive director for manufacturing, Catherine Beard, said the New Zealand result was "to a large degree, mirroring what is currently occurring offshore in the manufacturing scene".
"While the current New Zealand result represents a minor fall into contraction, spare a thought for the Australian manufacturing scene that fell significantly in July to 40.3.
Their low result is partly symptomatic of high current costs within their sector," she said.
Mr Scandrett said among the comments in the July survey were negative reports of seasonal slow-down factors.
"And there are references also to poor retail performance and how this is flowing back to impact on manufacturing decision-making."
During the past two months, local production and finished stock levels in Otago-Southland remained buoyant, but the corresponding sell-through activity was not there and inventory-building seemed to be order of the day, Mr Scandrett said.
