Employers are warning the Government they ignore the state of the manufacturing industry "at their peril".
A major report into the sector has been released by Economic Development Minister David Parker today.
It warns of job losses if the industry doesn't innovate and add value in order to keep up with low wage countries and changing technology.
The Ministry of Business, Innovation and Employment report is the first to look at the manufacturing sector as a whole.
It identifies difficulty in finding skilled tradespeople and a lack of scale relative to international competitors.
"The continued lack of productivity growth remains troubling and limits opportunities for development," Mr Parker says.
"Manufacturing is crucial to boosting jobs and growing our exports, particularly where New Zealand enjoys a comparative advantage."
The Employers' Manufacturers Association Kim Campbell says: "What's important to note about this report, is that we ignore the manufacturing sector at our peril."
Eleven per cent of the workforce is employed in the sector.
But a skills shortage has led to work visas for manufacturing-related occupations more than doubling in the last five years.
That's from 4,187 in 2011 to 9,469 in 2016. Over 60 per cent of these work visas were provided for technician and trade worker jobs.
"Of concern is investment in productivity, finding enough skilled workers and remaining competitive on the global market," Mr Campbell says.
Many in the industry are now adding value to their products to keep up with the rest of the world.