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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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4/2/11

Still waiting on a real recovery


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during January 2011, shows total sales in December 2010 decreased 0.9% (export sales decreased by 6% with domestic sales increasing 2%) on December 2009.

The NZMEA survey sample this month covered NZ$510m in annualised sales, with an export content of 37%.

Net confidence rose to 33, up from 23 last month.

The current performance index (a combination of profitability and cash flow) is at 102.5, up from 102 in November, the change index (capacity utilisation, staff levels, orders and inventories) went up to 105 from 101 in the last survey, and the forecast index (investment, sales, profitability and staff) is steady at 107.5. Anything less than 100 indicates a contraction.

Constraints reported were 92% markets and 8% skilled staff.

Staff numbers for December increased year on year by 2%.

“We have seen a decline in the expansion of sales, year on year, since the middle of 2010 and in December 2010 sales are lower than in December 2009,” says NZMEA Chief Executive John Walley. “Against this there continues to be some pick up in confidence levels and forward expectations. How this will play out remains to be seen.”

“Staff levels have risen slightly on last year and we have seen some difficulties in finding skilled staff.”

“We are continuing to see investment being held with firms really only replacing failing equipment or bringing previously contracted work in house. There is very little investment in capacity expansion.”

“The major reasons for this are uncertainty around how the global economy will fare this year and more importantly whether the exchange rate will remain at its elevated levels in the United States and Europe. Sales to Australian consumers are pretty good right now but products that are further processed and resold from Australia to the US and Europe are feeling the same margin pressures.”

“There was an expectation that we would see some detail on economic policy from the two major political parties but largely we were disappointed by the State of the Nation speeches. Talk around shifting the top tax rate and selling assets is really just a distraction from any solid policy proposals to turn the economy around. There were some high points with Labour reiterating its commitment to reforming monetary policy and both parties promising to do more to support research and development, but these areas should be the focus.”

“Longer term investment will only come if there is an expectation of better economic conditions to come. The Government and the Reserve Bank need to do their bit by addressing imbalances in the tax system and looking to stabilise the currency.”

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tags: survey, capacity expansion, skilled staff, r&d, currency

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