From NZ Manufacturer magazine, December 2024.

By EMA Head of Advanced Manufacturing, Jane Finlayson

There’s no doubt that 2024 has been another challenging year for New Zealand’s manufacturing sector.

Global uncertainties, local economic pressures, and significant supply chain disruptions have tested manufacturers across the country.

Yet, despite these obstacles, the resilience, adaptability, and determination of our manufacturing community have shone through. However, the year also showed how much work remains to be done to turn the sector around and get productivity back on track.

The latest BNZ-BusinessNZ Performance of Manufacturing Index (PMI) for November 2024 showed the 21st consecutive month of contraction for the sector, underscoring the ongoing pressures faced by many manufacturers.

While some encouraging signs were visible midway through the year, with what looked like a gradual return towards the neutral 50.0 mark, October and November decreases highlighted the fragility of the recovery.

The key sub-indices, such as production, employment and deliveries all registered below the neutral mark, with production activity in particular falling to its lowest point since July 2024.

The general economic slowdown continues to weigh heavily on the sector, with many manufacturers grappling with high costs, reduced domestic demand, and external pressures such as the ongoing fallout from global inflationary trends and trade disruptions.

These numbers don’t tell the full story. Beneath the surface, there’s a lot of good work happening. Many of you have been upskilling your teams, adopting new technologies, and finding smarter ways to operate.

These efforts are setting the groundwork for a sector that’s not only resilient but ready to thrive when markets ease and new free trade agreements start to deliver better trading opportunities for some of our goods.

Investing in People and Skills

One area that stood out this year is the investment being made in people and their ability to drive productivity, create a culture of safety and lead change.

The EMA has seen strong numbers of teams coming through to upskill in leadership, project management, and health and safety. Whether it’s improving machine guarding or ensuring health and safety representatives are well-equipped to maintain a safe working environment, these efforts are keeping workplaces safer and teams more confident.

Such investments help to keep operations running smoothly and safely and enhance the reputation of businesses as a positive place to work. This will be important to retain and attract skilled workers in individual manufacturing businesses and the sector as whole.

Industry 4.0: Keeping Ahead of the Game

Another bright spot this year has been maintaining the focus on helping manufacturers understand the benefits of Industry 4.0 technologies. The opportunity for improving productivity, safety, and sustainability is being adopted rapidly around the world and more and more manufacturers are understanding that they need to take action now to stay competitive and viable into the future.

If you are still unsure about how your business can benefit and what other businesses are doing, we’d encourage to you come to our ‘ASB Manufacturers Workshop: The Impact of Industry 4.0 on Your Business’ series, running from February to June 2025.

Like us, ASB Bank is committed to improving productivity in New Zealand businesses, and its support underscores its dedication to helping manufacturers stay one step ahead with the use of technology and process improvements.

In addition to the EMA and ASB, this programme is due to the collaboration of delivery partners including LMAC Group, whose experts have considerable experience in helping manufacturers transform from manual to digital/automated processes.  

We’re also grateful to Nautech Electronics for sharing its real-world experience with automation and its journey to adopt new ways of working.

The workshop wouldn’t be possible without Beca’s Beyon digital twin that takes you ‘inside’ the factory to demonstrate the benefits, and we also appreciate the support of Aspect, local providers of manufacturing execution systems.

If you can’t afford to be left behind, then grab other decision-makers from your business and join us for one of the 20 workshops, co-hosted by local business associations. Check out the details and register here.

Tackling Energy Challenges Head-On

With energy costs rising and new regulations around industrial processes – especially boilers – looming, the EMA teamed up with the Energy Efficiency & Conservation Authority (EECA) to run webinars that offered practical solutions.

Our ‘Greening the Furnace’ webinar explained what it all means and introduced EECA’s pathway towards decarbonising industrial heat.

We also ran a webinar on the best options for manufacturers to replace ageing equipment in their factories and warehouses, highlighting sustainable options that will save money and better position them for the changing regulatory environment.

Keep an eye out for more of these energy-related topics next year and remember to take advantage of the tailored tools and resources on the EECA website, to help lower emissions and unlock business benefits.

New Zealand signing the Agreement on Climate Change, Trade and Sustainability (ACCTS) with Costa Rica, Iceland and Switzerland this year is evidence that sustainability and a reduced environmental footprint is the way of the future, and a prerequisite for trade, in an increasing number of markets.

Health and Safety: Progress with Project Whakahaumaru

As we’ve outlined recently in NZ Manufacturer, health and safety has also been a major focus for this year.  Project Whakahaumaru has kicked off the collaborative effort to reduce harm in manufacturing. A big thanks to ACC, manufacturers, workers, and business associations who got behind us during the discovery phase. Together, we’ve developed a high-level strategic plan aimed at reducing harm and its economic and social costs.

We’re just getting started, and we trust this collaboration will keep rolling. Our goal is to provide practical tools and targeted programmes for the areas where harm is most common and where workers are most at risk.

We’ve also worked closely with WorkSafe and other manufacturing groups, using what we’ve learned to align priorities and drive change.

The willingness to work together and the collective desire to support a productive, safe and sustainable manufacturing sector have been standout features this year – all indicators that it can thrive in 2025.