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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Rebalance won’t happen while exchange rate constrains inflation

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Capital controls rather than the exchange rate must be used to restrain inflation say the New Zealand Manufacturers and Exporters Association (NZMEA). There are a number of options available to the Reserve Bank to restrict inflationary pressures through capital controls. These measures do not reduce returns and investment in the tradable sector.

NZMEA Chief Executive John Walley says, “Right now most developed countries are manipulating their currencies downwards in an attempt to spark an export led recovery. The notion that we would push ours artificially high to restrict inflation when the Government claims to be rebalancing the economy is ridiculous.”

“We need to learn a lesson from Australia. Their previously strong recovery is being stunted by a restrictively high dollar. Our currency is not far behind.”

“The Reserve Bank has shown with its introduction of the Core Funding Ratio that the world doesn’t end when a new tool is introduced. The RBNZ now needs to add a minimum retail deposit funded percentage and a loan to value ratio to this package.”

“All the while the ‘disinterested’ bank economists are talking up interest rates to pump their margins and lift the dollar, lowering their foreign debt exposure. The real economy is again the whipping boy of problems elsewhere in our economy.”

“We cannot expect exporters to lead an economic recovery when the biggest determinant of their success, the exchange rate, is allowed to be pushed higher and higher. The Government and the Reserve Bank need to devise a strategy that actually meets New Zealand’s real economic needs.”

tags: exchange rate, inflation, capital controls, reserve bank


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