Comments

David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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8/10/10

NZ must solve its own currency issue


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New Zealand must solve its own currency issue rather than waiting for the larger economies to sort the issue at the International Monetary Fund-World Bank meeting say the New Zealand Manufacturers and Exporters Association (NZMEA). While the distortions in monetary policy settings elsewhere are the major cause of our currency issues, the Government must take a pragmatic approach to the problem rather than simply hoping for the best.

NZMEA Chief Executive John Walley says, “The situation we are facing in terms of currency now is really no different to 2007. Then we had high interest rates while the United States and Europe ran looser monetary policy, creating a gap between the two. Now we have lower rates and the United States and Britain are printing money; the gap remains the same.”

Bill English commented to Bloomberg recently that, “We’re making significant changes to our tax system because we’re not going to get structural change through the exchange rate. We’re going to work on the bits we can influence.”

“Comments like that are very disappointing,” says Mr. Walley. “The Reserve Bank has already shown through its Core Funding Ratio that we can influence the exchange rate. To suggest that the Government is simply going to ignore the single biggest problem facing the economy is an untenable position for our exporters.”

“The Government claims to be focused on rebalancing the economy towards savings and exports. The options are available; all that is missing is the will.”
 



tags: core funding ratio, quantitative easing, rebalancing, exchange rate

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