NZ manufacturers record strongest quarter in seven years, Unleashed report finds

Beverage manufacturers have reported a strong first quarter, according to a new report from Unleashed.

Manufacturers in almost every industry have reported a boost in revenue and profitability, according to a new report from inventory management software provider Unleashed.

The average small-medium firm generated $310,000 of revenue from January 1 to March 31, 2025, an 80% improvement compared with the fourth quarter of 2024, according to Unleashed’s Manufacturing Health Index.

Unleashed’s head of product Jarrod Adam said the result was great for Kiwi manufacturers and it represented the strongest average revenue numbers since Unleashed began keeping records in 2018.

“Last year the pinch of a stubborn recession and widespread economic uncertainty resulted in a notable slump across virtually every sector but in this most recent quarter we saw the rolling annual average of revenue lift 7.5%,” Adam said.

The industries that have seen the largest improvement in sales include beverage manufacturers, building and construction, and food manufacturing.

The report shows that average beverage sector revenue experienced a 222% improvement year-on-year, with a 200% increase in profitability based on the average return per dollar spent on inventory, which has increased from 49c in Q4 2024 to $1.78.

The food sector had its best revenue quarter since 2023 with an average revenue of $282,000.

“These are great results for a beverage sector that has faced a steep slump for the past few years and which has been particularly hard on independent breweries,” Adam said.

“Hospitality is often on the front line of economic downturns as customers restrict spending but this is a hopeful sign that we are leaving the belt-tightening phase.”

In the building and construction industry, the report shows a 95% increase in revenue between Q4 2024 and Q1 2025 to $369,000 among the firms analysed.

According to the report, building and construction manufacturers emptied their warehouses at the end of last year in the face of potential tariffs and supply chain uncertainty.

The only sector that reported a decline in revenue was clothing, footwear and accessories.

It had a drop of 5.5% in average revenue from $111,000 in Q4 2024 to $105,000 in Q1 2025.

The weakening of the kiwi against the US dollar has been a growing concern and reflecting international trends in Australia and Britain, New Zealand businesses focused on clearing warehouses instead of replenishing inventory.

According to Unleashed, 64 purchase orders were issued to suppliers by the average small NZ manufacturer in the three months after Christmas.

That is the lowest figure since at least 2018, with an 11% reduction quarter-on-quarter and a 4.5% drop year-on-year. Although the total numbers fell, revenues remained strong, reflecting rising market confidence.

“The weakening dollar may have led manufacturers to defer purchasing and wait for a stronger dollar. That seems to be paying off as the NZ dollar trended upwards during Q1.

“Buyers may have also turned to local suppliers where possible. Accordingly, purchase order numbers are likely to increase in Q2 and beyond, especially if sales remain firm.”

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.