Canterbury manufacturers are concerned about the potential for the construction sector to lure their workers with higher wages.

This week leading manufacturer Skope Industries reported nearly half its staff had turned over in the past year and some of that was the result of workers leaving for construction jobs.

Skope said it had employed 191 new staff in the year, taking its complement to just over 400.

It is one more of the challenges for the Canterbury manufacturing sector, which has been in decline for three of the last four months but is starting to improve, according to a Business New Zealand survey released yesterday.

The manufacturing survey shows Canterbury-Westland in July improving on its June result with an index reading of 49.1, indicating the sector is still in a slight contraction.

Overall the New Zealand manufacturing sector remained in a holding pattern at 49.4 in July. A reading above 50 indicates expansion of the sector and below 50 decline.

Tom Thomson, managing director of local plastics manufacturer Elastomer, said the potential to lose staff to the construction sector was a concern for manufacturers.

"There is definitely a bit of a note of caution and we are all aware that we may find ourselves competing for long-term employees with a short-term construction market."

Thomson said the last four months had been a slow return to where the company was before.

"I would not say it's all doom and gloom. It's steady as she goes and heading in the right direction."

Elastomer had been fortunate to retain a large proportion of its staff. Those staff not originally from the region were more likely to leave following the earth- quakes.

The few that had left had generally gone south or to Australia.

The dollar was causing pain for manufacturers, especially those exporting to Asia, Europe, the United Kingdom and the United States.

- © Fairfax NZ News