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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5/10/12

Growth Stalled


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during September 2012, shows total sales in August 2012 decreased 2.75% (export sales increased by 10% with domestic sales decreasing 12.9%) on August 2011.

The NZMEA survey sample this month covered NZ$580m in annualised sales, with an export content of 50%.

Net confidence remained about level moving from -11 last month to -10 this month.

The current performance index (a combination of profitability and cash flow) is at 102, down from 104.5 in July, the change index (capacity utilisation, staff levels, orders and inventories) went down to 100 from 101 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 101, down on July’s result of 103. Anything less than 100 indicates a contraction.

Constraints reported were 90% markets and 10% skilled staff.

Staff numbers for August increased year on year by 2.4%.

“We have seen the impact of long run problems in the economy over the past couple of months,” says NZMEA Chief Executive John Walley. “We have seen some firms reach a tipping point due to the continued affects of a high NZ Dollar.”

“At a wider level the general theme of comments is that while many firms are able to tread water with the currency this high there are very few investing in future development. This will be a longer term slow growth or contraction story.”

“Sales continued to bounce around in August with export sales increasing year on year and domestic sales falling. With conditions remaining poor for manufacturing exporters this low to zero growth and volatility is expected by many to continue for the foreseeable future.”

“Index numbers were down on last month but an increase in staff numbers is a welcome positive.”

“Respondents to the survey were concerned about the possibility of further deterioration in world markets and the impact of lower sales, in combination with small margins. Deterioration in the Australian economy, their cut in the base rate, and further movement in the Australian dollar cross rate with the New Zealand Dollar is of particular concern. Remember Australia has for the most part been good for exporters to date.”

“While our international competitors take steps to support their export industries, largely through currency devaluation, and as long as our politicians continue to deny the obvious, our export decline will continue.”

“The response from the Government to the loss of export jobs demonstrates their short term view that cheap imports matter more than the success of the export sector. This approach is causing New Zealand’s current account deficit to grow and threatens economic growth and job prospects in the longer term.”
 

 

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tags: survey, currency, job losses, current account

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