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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8/3/12

Concern over currency but still no action


Print-friendly 1 comment(s) Posted in: In the media

The Reserve Bank must act on its concerns over currency appreciation say the New Zealand Manufacturers and Exporters Association (NZMEA). The Official Cash Rate was left at 2.5 percent this morning, but the Reserve Bank expressed concern over the level of the New Zealand Dollar.

Reserve Bank Governor Dr Alan Bollard commented that:
“While helping contain inflation, the high value of the New Zealand dollar is detrimental to the tradable sector, undermines GDP growth and inhibits rebalancing in the New Zealand economy. Sustained strength in the New Zealand dollar would reduce the need for future increases in the OCR.”

NZMEA Chief Executive John Walley says, “Alan Bollard mentioned the options for controlling the exchange rate during the press conference – direct intervention, quantitative easing and capital controls. The reasoning for not using these methods seems to be more based on inertia than analysis.”

“The Swiss National Bank has demonstrated that if returns in the tradable sector are a priority then exchange rate stability can be achieved. Critics of intervention will point to the cost of intervention but it is worth noting that a one percent rise in the exchange rate costs New Zealand exporters around $200 million per year. That puts the cost of intervention into perspective.”

“There are a number of tools available to stabilise the currency,” says Mr Walley, “the only thing absent is the will.”
 



tags: exchange rate, swiss national bank, capital controls, quantitative easing

comments

1 Comment(s)



New Zealand Bank - 28 March 2012 at 1:55 AM
I don't understand why is the reserve bank so weak and poor !

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Please play the ball not the man.