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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Sales improve off low base

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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during June 2011, shows total sales in May 2011 increased 15% (export sales increased by 22% with domestic sales increasing 10%) on May 2010.

The NZMEA survey sample this month covered NZ$382m in annualised sales, with an export content of 45%.

Net confidence fell to -33, down from the 13 result reported last month.

The current performance index (a combination of profitability and cash flow) is at 102, up from 99.5 in April, the change index (capacity utilisation, staff levels, orders and inventories) went down to 102 from 103 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 101.75, down on April’s result of 102.25. Anything less than 100 indicates a contraction.

Constraints reported were 67% markets, 22% production capacity and 11% capital.

Staff numbers for May increased year on year by 1.8%.

“We are starting to see a recovery in sales after the large drop in sales seen during the economic crisis and a period of bouncing along the bottom since,” says NZMEA Chief Executive John Walley.

“The recovery shows some pick up in markets offshore from depressed levels in the past couple of years and we have started to see some growth in the number of firms reporting capacity and capital as constraints. The Christchurch earthquakes are a contributing factor to production capacity problems.”

“The exchange rate remains a problem and it continues to suppress investment and any stronger recovery in export returns even at increased sales levels.”

“We have seen the impact of this with KiwiRail sourcing rolling stock from China National Rail rather than local manufacturers. A competitive exchange rate would have seen this work remain in New Zealand. Effectively the Government is choosing short-term spending power over long-term jobs and capacity development by completely ignoring the exchange rate in its Policy Targets Agreement with the Reserve Bank.”

“Lower confidence and index ratings indicate that respondents are very concerned about the fragile recovery in the United States and Europe and there are also concerns about the persistence of strong growth rates in China and Australia.”

“Christchurch manufacturers are continuing to report some difficulties getting insurance payments with some still waiting on business interruption payments from February.”

“More generally a supportive policy framework for the tradable sector is needed to maximise earnings and encourage investment if the demand increase is sustained.”

“Global markets remain uncertain, a more competitive exchange rate and other fiscal incentives are needed to encourage investment in the tradable sector.”


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tags: survey, constraints, canterbury earthquake, exchange rate, policy targets agreement


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