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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5/4/12

Economic flat line


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during March 2012, shows total sales in February 2012 increased 4.14% (export sales increased by 11.2% with domestic sales decreasing 0.83%) on February 2011.

The NZMEA survey sample this month covered NZ$515m in annualised sales, with an export content of 44%.

Net confidence remained level at +8.

The current performance index (a combination of profitability and cash flow) is at 101, the same as in January, the change index (capacity utilisation, staff levels, orders and inventories) increased to 104 from 102 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 103, down on January’s result of 106. Anything greater than 100 indicates expansion.

Constraints reported were 77% markets and 23% production capacity.

Staff numbers for February decreased year on year by 2.63%.

“Sales have had a slight upturn this month, but looking at the long-term trend it has been about four years now since we have seen any respectable numbers,” says NZMEA Chief Executive John Walley. “We have been bouncing along the bottom since 2008 and there are comments from respondents that conditions will get worse for manufacturers.”

“The exchange rate is the biggest concern with almost all respondents reporting it as the biggest threat to their business. Weakness in markets, rebuild issues in Christchurch and difficulties with the Ports of Auckland are also contributing to the adverse conditions.”

“Staff numbers continue to track downwards as firms look to keep costs down to deal with the uncertainty.”

“The production capacity constraint has increased this month and that reflects some transitional issues between buildings for those firms impacted by the earthquakes in Christchurch.”

“The underlying issue for the traded sector is the lack of investment in capacity expansion. Those firms that invested heavily five or so years ago have been burnt by the exchange rate, and while the same economic policy framework persists they will not be taking that risk again.”

“The Government must take a role in turning this around. As an OECD report last week stated small economies are hit harder exchange rate fluctuations than larger countries as the decision to export must come earlier in a firm’s development. Therefore, a fair and stable exchange rate must be a focus for the Government.”

 

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tags: survey, exchange rate, production capacity, profitability

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