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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Judging by Prime Minister John Key’s opening address to Parliament we are to anticipate more of the same in 2011; that means a continuation the economic funk seen over the past two years, and the resulting build up of debt. The New Zealand Manufacturers and Exporters Association (NZMEA) is calling for significant policy changes so that the tradeable sector can reverse this slide.

NZMEA Chief Executive John Walley says, “There seems to be an assumption that with high commodity prices the economy will just look after itself. We need to spark more investment and capacity expansion across our entire export sector; that is manufacturing, agriculture, services and tourism. It is worth noting that manufacturing contributes about the same to GDP as agriculture and tourism combined. We will not get rich exporting raw materials.”

John Key commented during his address to Parliament that, “The Government will continue to support stable and predictable monetary policy, focused on maintaining a low level of inflation and thereby minimising price increases across the economy. We note that this is not the position of some other parties in this Parliament.”

Mr Walley says, “Over the past ten years inflation in the tradeable sector has averaged 1.5% and inflation in the non-tradeable sector has averaged 3.7%. Price based inflation targeting has addressed inflation by killing off the tradeable economy via an overvalued exchange rate. A vote for a different approach to monetary policy is not a vote for higher inflation but it is a vote for supporting investment and expansion in our export sector.”

“Continuing with a monetary policy framework that overvalues the exchange rate is a recipe for a low export, low wage and high unemployment economy. Until this policy nettle is grasped, talk of rebalancing and recovery will be just that, talk.”

tags: john key, monetary policy, tradeable sector, economic rebalancing


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