Manufacturing Sector Report | May 2025

Our May 2025 Quarterly Canterbury Business Survey reveals a mixed landscape for manufacturing — some businesses are thriving, others holding steady, and many still doing it tough. But through it all, confidence and global demand are offering reasons to stay optimistic.

Download the May 2025 summary report here →

In the last quarterly survey, we highlighted that green shoots were appearing across New Zealand’s economy, however the markets recovery was very uneven across New Zealand, and that there was a clear three-speed economy with our large manufacturing sector:

1. A group of businesses are thriving in their niche markets and experiencing strong demand
2. A group of businesses that have made deep operational cuts and are cautiously optimistic, expecting improvements later in the year
3. A group of businesses under significant financial strain, relying on reserves or external funding while they wait for the market to rebound.

This quarter, we are seeing more of the same uneven market recovery across New Zealand, particularly in our manufacturing community. However in the background, we have seen record exports from New Zealand.

In March 2025, New Zealand's goods exports were valued at $7.6 billion, a 19% increase compared to March 2024, with a trade surplus of $970m recorded. In April 2025, goods exports reached a record $7.8 billion, a 25% increase from April 2024, with a trade surplus of $1.4 billion. The increase in exports was driven by strong global demand for New Zealand's primary products, particularly milk powder, butter, cheese, meat, and fruit. Looking deeper into these figures, we note that New Zealand's red meat exports during March achieved record values for any month, with sales worth $1.26 billion. Values increased by 34% compared to March 2024, with volumes for sheep meat and beef rising by 10%. New Zealand’s red meat sector continued its strong performance in April with overall exports worth $1.21 billion, according to the Meat Industry Association. That’s a 34% year-over-year increase, with growth in nearly all major markets. The United States was the largest market, followed by China, the European Union, Japan and the United Kingdom. These latest export figures reflected the continued strong demand for red meat globally.

We are all watching and waiting to see how the benefits of New Zealand’s record primary products exports flow through to the wider manufacturing community, along with the benefits from the companies trading strongly in their niche markets. This has not yet translated into widespread employment or significant investment in capital plant and equipment across the manufacturing sector. The highly uncertain global marketplace, characterised by tariffs and trade wars, as well as increased global political tensions, combined with rising domestic input prices (particularly energy), has tempered growth expectations for many New Zealand manufacturing companies.

While these observations align with the latest drop of confidence in the latest PMI survey and our own Business Canterbury Quarterly survey results, it also has to be highlighted that our Manufacturing Snapshot within our latest quarterly survey show:

• 71% of manufacturers surveyed are confident in their ability to deal with disruption
• 65% expect the Canterbury economy to be stronger in 12 months
• 63% expect to hire new staff within the next 12 months
• 60% expect to invest in property, plant & equipment within the next 12 months.

It will be interesting to see how the recent Investment Boost scheme, which provides a 20% depreciation on the purchase of new assets made after May 22nd, and the recent expansion of the Green List, adding 10 new trade occupations from August 22nd, will stimulate the wider manufacturing sector.

If you're a Canterbury manufacturer and would like to talk through upcoming challenges or opportunities in front of you, reach out if you would like to connect with me. If you are not yet a Manufacturing Member with Business Canterbury, now’s a great time to get started. From tailored advice to valuable networks, we’re here to back your business and help you make things happen. Find out more and join us.