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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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during February 2012, shows total sales in January 2012 decreased 1.39% (export sales increased by 8.16% with domestic sales decreasing 6.41%) on January 2011.

The NZMEA survey sample this month covered NZ$440m in annualised sales, with an export content of 38%.

Net confidence dropped slightly to 8, down from the 10 result reported last month.

The current performance index (a combination of profitability and cash flow) is at 101, down from 104.5 in December, the change index (capacity utilisation, staff levels, orders and inventories) went up to 102 from 100 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 106.25, up on December’s result of 104.75. Anything less than 100 indicates a contraction.

Constraints reported were 92% markets and 8% production capacity.

Staff numbers for January decreased year on year by 4.13%.

“A drop in sales this month and falling staff numbers for the past five months indicate that a recovery is still a distant prospect,” says NZMEA Chief Executive John Walley. “Markets remain a constant problem and the exchange rate has cut margins to a point where some firms are questioning whether to abandon export markets.”

“A split between Northern and Southern Europe is getting more pronounced as Southern Europe continues to suffer debt and confidence problems while in Northern Europe it seems to be business as usual. Payments by instalment are increasing in Southern Europe and South America from businesses that have previously been able to pay in full. Chasing late payments is starting to present significant costs for some firms.”

“The exchange rate appreciation has hit margins in Europe hard and there are reports of manufacturers in Australia suffering the same problem, making sales difficult for New Zealand manufacturers that are part of their supply chains.”

“In Christchurch the goalposts keep changing on manufacturers looking to rebuild and repair buildings. Insurance difficulties and on-going uncertainty around planning and rebuild issues remain as barriers to getting things done. Delays have burnt off the business interruption indemnity period for many and resolution seems some way off. One respondent reported having to deal with 6 loss adjusters so far and still no outcome!”

“Another firm with only minor damage has pointed out that that their repair bill would be repaid within two years with the higher premiums now being charged by insurers.”

“Respondents have rated the exchange rate as the major barrier to investment in the traded sector. The problem is having much more impact than when the currency was in the eighty cents US range in 2007 and 2008, as back then volume made up for some of the difficulty. Now with lower volumes and policy differences between here and the big economies, there is no prospect of lower rates any time soon.”

“There are a number of firms considering whether they can continue to do business from New Zealand.”


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tags: survey, exchange rate, supply chains, insurance


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