The Maoris had done some manufacturing before the white settlement, using mainly the flax plant (phormium tenax (q.v.), the fibre of which was pared by hand with the aid of a sharp shell and used to make mats, garments, baskets, nets, and lashings. They made only special and limited use of the rich timber resources. It was the visits of the whalers, warships, and storeships from Australia, that made the Maoris realise the value of the forests. As a result many of them became expert sawyers, supplying the traders with timber as well as flax.

The virtues of the New Zealand flax for rope making led to attempts to develop the preparation of the flax hemp for export. Unfortunately, however, the Maori was unwilling to produce the flax hemp in anything like the quantities which were needed and the European was unable to evolve a satisfactory method for extracting it. As a result, the fluctuating supplies and uneven quality of the fibre that was exported led to the rapid spoiling of the market, and the trade was not fully restored until towards the end of the century.

Probably the first industry which the Pakeha did successfully establish was based on the vast timber resources of the new country. This was the construction of small sea-going boats, mostly brigs, which were used for the colonial trade. Before the main white settlement “Pakeha Maoris”, or whites living in Maori communities, had taught the natives how to build boats and small ships. Shipbuilding was particularly important in the far north and dozens of small vessels were built on the shores of the northern harbours. These travelled as far afield as the Pacific Islands, Australia, the West Coast of America, and even China. By the fifties, the ship-building industry was largely centred on Auckland's Waitemata Harbour. Besides the small sailing vessels being built, attempts were made to build wooden steamboats, but this enterprise met with little success. Somewhat later a small number of iron steamboats were built, but this development did not get very far in the face of the competition of obsolete low-priced vessels from the fleets of the older countries. Nevertheless, up to 1887, 98 iron steamers of sufficient size to be put on the register of shipping had been built in New Zealand and, with few exceptions, their engines had been built here also.

As colonisation grew, the timber industry developed to meet the needs of the new arrivals. Besides spars and planking for ships, there arose a demand for timber for housebuilding and, later, for railway sleepers, telegraph poles, and construction uses generally. By 1876 there were 150 mills in operation cutting 130 million feet of timber a year, and by 1891 there were 250 mills at work.

The early manufacturing industries existed mainly to supply the basic needs of the various small communities that were taking shape and to provide the ropes and spars and repair services for the ships of the visiting traders. Apart from the ship building, which was a capital goods industry, most of the early industries produced consumer goods. Flourmills, flaxmills, fellmongeries, and ropewalks led the way in the early 1840s, followed, in the middle years of the decade, by breweries, brick kilns, and cooperages. In the late forties lime kilns, ship and boat yards, soap and candle works, and tanneries were established. The size of the market–small and local–and the low incomes and living standards of the people, meant that the growth and range of these industries were restricted. There was, of course, no government help to industry, which relied solely on the skills of the artisans employed–the blacksmith, the cooper, the joiner, the sawyer. This work was initially handicraft, but as the settlements grew it became factory based.

Statistics of factory production were first collected in New Zealand in 1867. These show that the industries established included grain mills, biscuit factories, a bone-manure works, coach-building factories, wool-scouring works, cordial and aerated-water factories, engineering workshops, sash and door factories, and a woollen mill, all additional to those which had been in existence by the end of the 1840s. Almost all the factories were still concerned with the supplying of local needs, although the exporting of some products was to follow before long. The agricultural-equipment industry is a good example both of the development from handicraft to factory-based operation and of the establishment of an export trade.