The Bank of New Zealand -- Business NZ performance of manufacturing index (PMI) fell three points from July to a seasonally adjusted 45.7 in August, which was similar to the result for June.
A PMI above 50 points indicates manufacturing activity is expanding; below 50 indicates it is contracting.
The four consecutive months of decline confirmed in the latest survey equals the previous longest period of contraction which happened in late 2005 and early 2006. BNZ head of research Stephen Toplis said the survey was "quite disconcerting in its negativity".
Most worrying was the drop in the production diffusion index to 42.3 points, the lowest level in the six year history of the series, and ongoing weakness in new orders. Toplis did note several indicators in the wider economy had started "to find their feet again", but other factors were warning of an outlook that was more dire than folk might care to assume.
Overall, he was optimistic a combination of rapidly easing monetary conditions, and coming substantial fiscal stimulus, would result in a much stronger economy.
Business NZ chief executive Phil O'Reilly said there were some encouraging aspects with the August result, namely comments around the drop in the New Zealand dollar over the last month.
But manufacturing production continued to struggle, while the sector had also seen a contraction in employment levels during the past seven months, he said.
