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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1/11/10

Currency problem 'worse than 2007'


Print-friendly 0 comment(s) Posted in: In the media

The currency problem is worse than in 2007 despite slightly lower cross rates say the New Zealand Manufacturers and Exporters Association (NZMEA). The lower sales volumes in today’s market mean that the low margins are hitting exporters much harder.

NZMEA Chief Executive John Walley says, “When the dollar hit post float highs in 2007 we had strong worldwide demand to offset lower margins. Now coming out of the recession demand remains relatively weak, and it has to be remembered that firms that have made it this far have already cut out any fat from their processes.”

“There has been some talk that exporters need to use the high currency to buy equipment from offshore, or that exporters have somehow learned to cope with an overvalued currency.”

“Such comments are simplistic. Exporters who have made it this far are sharper, but they have been burnt once too often and they are not investing in capacity expansion. Why risk more capital? That is the question I hear most often,” says Mr. Walley.

“The graph shows that since 2004 there has not been any sustained period where the dollar has eased off. Short and medium term volatility coupled with consistent speculative pressure overvaluing the currency sap the life blood out of expansion and investment in the real economy.”

“It is clear that what we have is not working, we need to find a practical solution.”
 



tags: export investment, nz dollar, currency volatility

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