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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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16/11/11

NZ Dollar costs exporters $6.6 billion


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Rises in the New Zealand dollar have cost exporters approximately $6.6 billion over two and a half years according to the New Zealand Manufacturers and Exporters Association (NZMEA). In February 2009 the NZ Dollar bottomed out at 52.3 on the Trade Weighted Index (TWI), but since then currency manipulation overseas and inaction in New Zealand have seen the NZ Dollar TWI rise to 72.1 in August.

NZMEA Chief Executive John Walley says, “For every one percent the currency rises it costs New Zealand exporters approximately $200 million on an annual basis. Between February 2009 and August this year the NZ Dollar rose by 38 percent and it has averaged 13 percent above the February level over the last two and a half years. That has come at significant cost to the exporters that earn New Zealand’s living.”

“We have seen the impact with exporters such as Rakon announcing the negative impact of currency volatility - and these are the larger companies with an international footprint who are able to hedge more effectively to mitigate exchange rate problems – what chance do smaller players have?”

“We have heard from the Government and the Reserve Bank that it is too hard to make policy changes in this area, but a $6.6 billion impact shows that intransigence comes at a massive cost. To put a scale on this, the sale of Air New Zealand and the energy State Owned Enterprises is projected to raise $7 billion as a one off. For a Government that claims to champion the tradable economy it is unfathomable that they would standby and see the export sector taxed to death by a high currency.”

“There is no easy fix to an overvalued currency, but there are options available and they must be considered if New Zealand is to earn its way out of debt.”

“Further views on how exporters would like to see economic policy move are available at www.changenz.co.nz.”
 



tags: changenz, monetary policy, exports, currency volatility, exchange rate

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