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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21/12/12

Performance and Expectations Soft


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during December 2012, shows total sales in November 2012 increased 2.86% (export sales increased by 20.3% with domestic sales decreasing 6.42%) on November 2011.

The NZMEA survey sample this month covered NZ$543m in annualised sales, with an export content of 41%.

Net confidence came out at 0, up from the -18 result reported last month.

The current performance index (a combination of profitability and cash flow) is at 104.5, up from 93.5 in October, the change index (capacity utilisation, staff levels, orders and inventories) went up to 102 from 96 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 104, up on October’s result of 98.5. Anything less than 100 indicates a contraction.

Constraints reported were 73% markets, 9% production capacity and 18% skilled staff.

Staff numbers for November decreased year on year by 0.5%.

“A bit of a mixed bag; employment down, composite index up on the month for the first time since mid-year and sales in positive territory but less than last month. Overall trends are close to zero and with the inexorable appreciation of the currency you would have to be an unrestrained optimist to draw a lot of festive cheer from this survey.” said NZMEA CEO John Walley.

“It looks like December results will not show any real change to this picture. Markets are slow and the further currency strengthening following the do-nothing November Monetary Policy Statement will take yet more shine off the margin from the sales that are made.”

Recent Treasury reports indicate a contraction in the current account deficit at 4.7% of GDP. But the long run trend is set to see the deficit increase next year. Balancing the current account needs much more Government focus.

Generally, manufacturing decreased by 1.1% in the September 2012 quarter say Statistics New Zealand. Overall GDP growth was low at 0.2% and construction, off a very low base, increased 4.5%.

“The September quarter is soft and our more recent indicators suggest the December quarter will be the same; we need the export sector to fire, but sadly our currency appreciation puts it out.”

“While some manufacturers are seeing increased turnover, most are seeing margin pressure and the overall picture is soft. Manufacturing and the export sector matters, and Government needs to show some real intent to address the structural currency issue.”

 

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tags: survey, exchange rate, performance, employment

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