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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16/1/12

Currency a problem to be managed


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New Zealand’s currency overvaluation cannot be simply put down to economic weakness elsewhere say the New Zealand Manufacturers and Exporters Association (NZMEA). It is the monetary policy contrast between the RBNZ’s inaction and the interventionist policies overseas that accounts for a persistently overvalued currency.

NZMEA Chief Executive John Walley says, “The ‘there is nothing we can do’ mind-set needs to change. The economic weakness of others we can’t control but our own policy response we can. Changes need to be made to support an export lead recovery for New Zealand.”

“Over the past year we have seen other countries ‘independent’ central banks 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 Switzerland and Singapore.”

“There has been no such action in New Zealand and our export sector, particularly the high added value sector, continues to suffer as a result.”

“It is complacent to suggest there is nothing we can do when many countries have successfully supported their export sectors,” says Mr Walley.

“We need sensible and pragmatic policy from the Government and the Reserve Bank to provide similar support our export sector. We are an export exposed country – we cannot simply sit back and pretend we cannot have some control of our own destiny.”
 



tags: currency, monetary policy, rbnz

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