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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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26/2/13

Living in a fool's paradise


Print-friendly 0 comment(s) Posted in: In the media

John Key recently claimed that the high dollar is a good thing, saying “For a lot of New Zealand consumers, their life’s actually a lot better because of the strong dollar.” This claim looks at only one part of the complex story of exchange rates which is harming our manufacturers and exporters, says the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “Recent research shows that import prices have relatively little impact on overall consumer prices. In any event, to consume much at all, you need a job, which will become more scarce as exporters close or move under the current pressure.”

“Although the high dollar does make imports cheaper, it is seriously hurting manufacturers and exporters, margins and competitiveness. This puts jobs at risk, and reduces the likelihood of reinvestment to improve productivity and employment.”

“Manufacturing is a relatively high wage sector, with higher median weekly incomes than the average for our economy. Wage rates tend to reflect labour productivity, margins and investment. Supporting investment in the manufacturing sector is the only way to sustain and improve real wages and living standards.”

“We cannot expect labour productivity to improve if policy settings starve margins and investment, slowing innovation and skill accumulation of our work force.”

“Our economy needs to operate in such a way that we can expect to build a strong export sector that will provide jobs and wealth in the long term, as a opposed to the short term overvalued exchange rate fools paradise.”

“Although a lower dollar may cause the price of imports to rise, there would be little identifiable impact overall on consumer price, as most New Zealand dollars spent relate to things that have costs in New Zealand dollars. We all visit the supermarket more often than the TV shop."

“Research conducted by the Reserve Bank of Australia showed that a 10 per cent appreciation in the exchange rate translated to only a 1 per cent decrease in consumer prices over around three years.”



tags: john key, exchange rate, wages, manufacturing, exporting

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