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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1/2/13

Quarterly Survey: No change despite “overvalued” dollar


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during January 2013, shows total sales in December 2012 decreased 5.35% (export sales decreased by 3.83% with domestic sales decreasing 6.62%) on December 2011.

The NZMEA survey sample this month covered NZ$556m in annualised sales, with an export content of 46%.

Net confidence fell to -14, down from the 0 result reported last month.

The current performance index (a combination of profitability and cash flow) is at 101, down from 104.5 in November, the change index (capacity utilisation, staff levels, orders and inventories) went down to 97 from 102 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 101.75, down on November’s result of 104. Anything less than 100 indicates a contraction.

Constraints reported were 86% markets, 7% skilled staff and 7% production.

Staff numbers for December increased year on year by 1.89%.

“2012 ended on a negative note, both domestic and export sales fell year on year,” says NZMEA Chief Executive John Walley.

“Confidence fell, after a bit of a recovery in November. This is largely due the ever higher exchange rate. At the same time we see decreases on our composite indexes.”

“There is not really a lot of good news about at the moment, markets are soft and margins are squeezed by the exchange rate.”

“The Reserve Bank yet again chose to keep interest rates at 2.5%, despite the recognition that the dollar is overvalued. This is disappointing, as the recent low inflationary pressures have left room for a cut to boost growth and counteract some of the exchange rate appreciation. Their main concern, as always, was a house price bubble, but bereft of any supplementary instruments interest rates cannot do it all. Mutterings from the RBNZ on loan to value limits on lenders need to be front and centre.

“We do not share the RBNZ’s view that the coming year looks positive; the drought will crimp primary volumes and markets are very fragile; witness GDP numbers late last year in the USA.”

“The world is changing; Tobin (financial transaction) tax in Europe, the USA is targeting employment not inflation and the UK is in turmoil as the Bank of England goes through a change in Governor. It is still too early to say for certain but it appears that Mark Carney might be a breath of fresh air. We need some new thinking here in New Zealand.”

“Government is fixed in its views and is ambivalent about the exchange rate, regardless of what the world might be doing. The idea that the Christchurch rebuild will offer some relief is correct but we need to keep a sense of proportion; the NZ$30b rebuild impulse will be spread over a decade while exports amount to around NZ$60b each and every year.”

“The first day of the Manufacturing Inquiry made it clear that the top three things that matter to exporters is the exchange rate.” 

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tags: survey, exports, manufacturing, reserve bank, ocr

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