Whakanao | Manufacturing

Horopaki | Situation

The manufacturing sector is a vital part of the Canterbury labour market. As an industry it has a wide reach – it is the process that changes raw materials, substances and components into new products and includes almost everything we eat, wear or touch.

The sector is a significant investor in research and development and fosters innovations that make us more productive and competitive internationally. It is one of the main ways that we add value to our products and – like the digital technologies sector – it is an important enabler for other sections in the economy. It provides components, products and packaging for other key industries, and is a critical part of the drive to move New Zealand towards an economic transition beyond commodities to value-add exports. Manufacturing is also a key contributor to the regional economies of New Zealand. Canterbury has one of the largest manufacturing sectors in the country and it’s the largest employment sector in the region at 11.8% (2020). It employs over 36,000 people and in 2021, contributed $3889 million towards Canterbury’s GDP.

Growth within the Canterbury manufacturing sector has fluctuated over the last 20 years with the number of staff employed now, similar to the number employed in the year 2000. This has been both a challenge and an opportunity, and can largely be attributed to the changing nature of the manufacturing sector, plus the impact of technological advances and globalisation of the manufacturing workforce in Canterbury. Whilst a lot of Canterbury’s manufacturing is centred in Christchurch, the Timaru District has New Zealand’s widest variety of food processors and manufacturers in one geographically-closed location, accompanied by one of the lowest unemployment rates.

When looking at the Canterbury manufacturing workforce we can see some key characteristics that help us understand the environment the industry operates in, including:

• Men make up a significant proportion of the workforce (steady at near 70% over the last 20 years).
• The industry has a higher proportion of low and medium skilled workers.
• There is a lower percentage of youth and a higher proportion of workers between 40-59.
• Most workers are employed full-time.

Canterbury has a long history of innovation and success in the manufacturing sector and it is home to some long-established, as well as some new and emerging, nationally and internationally successful businesses. It’s the biggest industry in the region by employment, and is predicted to grow at a faster rate than the rest of the economy. This provides the region with a significant opportunity to build a more productive, prosperous and resilient regional workforce that will be well placed to take advantage of emerging opportunities and demands, both at home and overseas.

Ngā taero | Complications

The manufacturing industry has undergone significant change over the past couple of decades, with advances in technology, competition from overseas and increased automation reducing employment options in some traditional parts of the manufacturing sector, whilst driving growth in others.

Attracting, retaining and developing an appropriately skilled workforce to meet business needs has been an ongoing challenge that is impacting manufacturing businesses across Canterbury. There has been a long-standing need to improve the way New Zealanders view and understand manufacturing and the workforce it requires. We also need to get better at developing and training skilled talent locally, whilst still having access to specialist skills from overseas. These issues have only been emphasised and deepened by changes to immigration and the border settings in recent years, brought about by the COVID-19 pandemic.

Current labour shortages and rising businesses costs have been exacerbated by recent widespread supply chain difficulties that have increased export and import costs, and significantly disrupted business scheduling and the reliability of logistics planning. During stakeholder engagement for this sector, there were widespread accounts of businesses unable to complete or take on additional orders as materials and skilled labour became more and more scarce. Minimising situations like this will clearly only provide positive impacts for the Canterbury economy as a whole.

These challenges are set against a backdrop of several industry-wide developments that continue to impact the sector. The Manufacturing Report 2018 – 'Beyond Commodities: Manufacturing into the Future' – identifies challenges and evolving themes around:

• Challenges of competing on scale and price from New Zealand.
• Need for continued and ongoing research and development spend.
• Increases in digitisation and automation (placing challenges on existing workforce to upskill).
• High demand for skilled tradespeople with technical expertise.
• Sustainability considerations are a growing customer expectation.
• Services increasingly integrating with manufacturing.

Whakapae | Summation

With ongoing structural changes within manufacturing, the need for Canterbury to focus on solving challenges and grasping opportunities in the manufacturing sector is clear.

There needs to be an industry-wide, coordinated and connected drive to attract and retain a more diverse and highly skilled workforce, and provide more pathways into and across the industry. We must promote solutions that alleviate urgent business needs now, whilst also encouraging longer term solutions that will create an environment where more workers are attracted towards and welcomed into a future in manufacturing. The Canterbury RSLG highlights some key issues and actions for the manufacturing sector below:

Ngā mahi | Actions

See Hei mahi | Summary of actions for full details 

Cross cutting actions on:

Migration settings – Promote migration settings that enable Canterbury to recruit the skilled and experienced international workforce that they need (that cannot be found nationally) to thrive.

Promote Canterbury – Support industry- led campaigns to attract more workers across key priority sectors to Canterbury as an ideal destination to live and work – both from within New Zealand and overseas.

Workplace diversity – Support programmes that aim to improve diversity in under-represented workforce sectors. In particular this includes groups such as women, Māori, Pacific peoples and the neuro diverse.

Training pathways – Facilitate the development and uptake of new training pathways that provide ways of recognising prior learning, upskill new or returning staff and support meeting immediate training needs in a cost-effective way.

Up-to-date training – Facilitate closer connections between training providers and industry to ensure training courses are up-to -date, use relevant tools and methods, build current worker capability, and develop work -ready graduates.

Best practice workplaces – Research and map best practices that foster supportive workplace environments and a positive culture among staff, where diversity and safety in the workforce is valued.

Sector perceptions – Work with sectors and industries to educate and change outdated perceptions of the focus sectors, promote why they could be a good choice, and the diversity and range of opportunities available in them.

Area-specific actions:

Manufacturing workforce diversity – Support programmes that look to specifically increase diversity in the manufacturing workforce. In particular groups such as women, Māori and Pacific peoples. Develop positive case studies that showcase the success of Māori rangatahi, workers, employers and business owners in manufacturing.

Manufacturing productivity and innovation – Facilitate the mapping of existing vocational and tertiary learning modules for the sector and their uptake. Assist in the exploration of new learning and upskilling opportunities for the sector. Using new training paths, delivery methods and increasing access for more current and future employees. Business development and capability building is enhanced, and leaders are encouraged to explore more innovation and investment.

<Digital technologies | Summary of actions>