The May Bank of New Zealand-Business New Zealand performance in manufacturing index (PMI) shows seasonally-adjusted activity at 49.3, 2.2 points down from April, although it was still higher than the March result.
The Otago-Southland index was 51.8, a slight expansion on April.
The northern region (44.1) recorded its fifth consecutive decline and was now at its lowest level since January 2006.
Canterbury-Westland (48.2) recorded its second consecutive decline and the central region (52.8) recovered from five consecutive falls to record moderate expansion in May.
Nationally, the slight contraction recorded in May takes the average PMI value for 2008 to date to 50.9, below the average value of 54.3 since the survey began in 2002.
A PMI reading above 50 indicates that manufacturing is generally expanding and below 50 that it is declining.
PMI values for May in the years 2002-07 range from 51.4 to 59.2, meaning the May result this year was the lowest recorded.
Business NZ chief executive Phil O'Reilly said the PMI indicated the tough times manufacturers were facing.
"There are still groups of manufacturers who are experiencing positive outcomes from the current economic situation, acquiring new customers and businesses.
"However, three-quarters of manufacturers are working through issues involving a global slow down, a high New Zealand dollar and a flat domestic market."
The global PMI showed New Zealand manufacturers were not alone in dealing with the difficult times, although that was of little comfort, he said.
