After a year of cautious headlines and slow-moving indicators, ChristchurchNZ Economic Analyst Sophie Jones says Canterbury’s economy may finally be finding its rhythm again – driven by the steady momentum of its two most grounded industries: manufacturing and agriculture.
In February, Canterbury recorded the strongest manufacturing performance in the country, according to the Performance of Manufacturing Index (PMI). The region’s score of 62.3 marked its highest level since mid-2021 and stood well above the national average of 54.4. While a single month’s data doesn’t define a trend, it does offer something that’s been in short supply across many sectors over the past year: confidence.
And in Canterbury, that confidence appears well placed.
Manufacturing: The economic engine room
Manufacturing remains the largest sector in Canterbury by GDP, contributing 10% to regional output. It’s also one of the region’s largest employers, with a workforce of 40,000 – about 10% of all jobs in the region.
While people may typically picture machinery and heavy industry, Canterbury’s manufacturing base is diverse. It spans everything from textiles and wood products to metal fabrication, chemicals, and furniture. Importantly, a significant share – around 40% of the sector’s workforce – is employed in food manufacturing, particularly meat and dairy processing. This overlap between agriculture and manufacturing is one of the region’s greatest strengths.
Canterbury is also New Zealand’s second-largest manufacturing region, generating 14% of the country’s total manufacturing GDP, second only to Auckland. Yet its manufacturing sector is more intimately tied to the land than most – processing raw goods into high-value exports and supplying essential equipment and infrastructure to primary producers. In Canterbury, agriculture and manufacturing don’t operate in silos – they operate in synergy.
Sophie Jones - ChristchurchNZ Economic AnalystIn a national economy still navigating uncertainty, Canterbury’s twin economic engines – manufacturing and agriculture – are proving both resilient and forward-looking.
Agriculture’s rebound fuels momentum
Canterbury is New Zealand’s largest agricultural region by GDP, producing 20% of the country’s total agricultural output. The sector accounts for 6% of the region’s GDP and directly employs another 20,000 people.
In recent months, several tailwinds have lifted the sector. After a tough period in 2023 and early 2024, commodity prices have rebounded sharply. The ANZ Commodity Price Index shows dairy prices up 15% year-on-year, and meat and wool up 22% as of February. New Zealand’s milk production is also running higher than usual at a time when global output is lagging – creating opportunities for local producers to fill a growing supply gap.
This resurgence has started to show up in the region’s export data. The value of monthly goods exports from Canterbury ports has topped $1 billion twice in recent months – the first time since mid-2023. The regional trade balance is back in surplus after dipping into negative territory last year.
Confidence grows, investment follows
It’s no surprise, then, that consumer confidence in Canterbury was the highest in the country during March, according to data from Wespac. While the regional index fell slightly from the previous quarter, it remained above its five-year average – a distinction shared only with Otago and Southland. Analysts at Westpac have linked this resilience to the strength of the agricultural sector, and the export revenue uplift that has come with it.
That optimism is translating into business sentiment as well. In a March survey by Business Canterbury, 57% of manufacturers said they intend to hire staff over the next 12 months. In addition, 72% plan to invest in property, plant, or equipment – a signal of long-term confidence.
Beyond food: The broader face of manufacturing
While food manufacturing plays a leading role, Canterbury’s manufacturing sector also underpins the region’s high-tech and future-focused industries. Without this foundation, there would be no aerospace industry here, no electronics clusters, no advanced engineering workshops. Businesses like Tait Electronics and Fabrum aren’t anomalies – they’re part of a broader network of skilled, high-wage, high-tech employment that makes Canterbury uniquely competitive.
These strengths are especially important given the ongoing challenges in the services sector, which remained in contraction in February according to the Performance of Services Index. In contrast, manufacturing is expanding, and with it, the potential for broader economic recovery.
Laying the groundwork for growth
It would be premature to declare a full recovery. For much of the past year, the manufacturing sector has struggled – Canterbury’s PMI score was in contraction for eight of the last 12 months. But recent performance, combined with rising business confidence, suggests that the foundations for growth are firming.
In a national economy still navigating uncertainty, Canterbury’s twin economic engines – manufacturing and agriculture – are proving both resilient and forward-looking. As international political volatility shifts global demand and domestic pressures evolve, the region is demonstrating how strong roots can support a strong recovery.
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