Comments

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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15/9/11

Reserve Bank and Government shirk responsibilities


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The Government and the Reserve Bank must take ownership of the overvalued exchange rate say the New Zealand Manufacturers and Exporters Association (NZMEA). It is not acceptable just to decry the effects of a high New Zealand dollar. Other countries are taking action and it is long past time for our policy makers to the same.

NZMEA Chief Executive John Walley says, “There was some talk at this morning’s Monetary Policy Statement about Swiss intervention to reduce their currency, whether non-tradable inflation would be a better target for the Reserve Bank and on additional tools that could be used. Unfortunately we see no action and the resulting decline in the tradable sector.”

“The Swiss said what they would do and got on with it; to date it has worked. A firm commitment from the Reserve Bank to target domestic inflation would immediately see the dollar fall. Currency traders know that another tool would have to be used as interest rates don’t work against domestic inflation.”

“Reserve Bank Governor Alan Bollard freely admits that a high exchange rate is keeping inflation down – this has been happening since 2005 and it is no surprise that the same point marked the beginning of the tradable sector’s decline.”

“The Statistics New Zealand Survey of Manufacturing released this week shows the same trend; added value exports to the United States and Europe are becoming less and less viable.”

“A future relying on raw material exports is a low growth and low wage future. The Government and the Reserve Bank need to work together to find a solution.”
 



tags: reserve bank, exchange rate, non-traded inflation, currency intervention

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