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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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29/4/11

Export growth ignored again


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

The Reserve Bank must do better than comments like “the elevated level of the New Zealand dollar is unwelcome” from Governor Dr Alan Bollard yesterday. The Government and its officials cannot claim to support an export led recovery while resisting reform of monetary and fiscal policy that continues to exacerbate the single biggest problem impacting exporters say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “There are a number of exporters who cannot survive if the dollar stays around the eighty US cent mark for a sustained period of time.”

“These are exporters we badly need producing value added, differentiated products that have a sustainable future at sensible long run average exchange rates.”

“These are the firms that should be leading the export recovery, but our macroeconomic policy is driving them out of business instead.”

Exports by level of processing 2010 (NZD)

Unprocessed Primary Products Processed Primary Products Simply Transformed Manufactures Elaborately Transformed Manufactures Miscellaneous, Unclassified and Confidential Trade
$14.1 billion $15.9 billion $4.1 billion $7.2 billion $2.2 billion

“There has been some talk that rising commodity prices justify a rise in the dollar,” says Mr Walley. “As the table shows, most of New Zealand’s exports are not the unprocessed commodities that might fundamentally justify higher exchange rates. Export growth in the processed primary and manufacturing sectors require investment in product development, new plant and equipment to improve capacity. A high and volatile currency will increase the uncertainty of return, pushing back against export focused investment.”

“It is worth noting that the annual bilateral trade is worth about as much as a single day’s trade in the New Zealand dollar – exchange rates have little to do with trade in the real economy.”

“An economy that barely missed a double-dip recession and has been hit by an earthquake does not justify a high currency. The only reason currency pressures persist is that other countries are taking action to lower their exchange rates, whether through quantitative easing in the United States and the United Kingdom, capital controls in Canada and Brazil or direct currency management in China and Singapore, while our policy makers sit on their hands.”
 



tags: reserve bank, new zealand dollar, alan bollard, john walley

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