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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5/7/13

Short term improvements, structural concerns


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during June 2013, shows total sales in May 2013 increased 1.09% (export sales increased by 23.4% with domestic sales decreasing 12.1%) on May 2012.

The NZMEA survey sample this month covered NZ$501m in annualised sales, with an export content of 45%.

Net confidence rose to 33, up from the -9 result reported last month; however the “no change” respondents dominated the return.

The current performance index (a combination of profitability and cash flow) is at 104, up from 101 in April, the change index (capacity utilisation, staff levels, orders and inventories) went up to 105 from 100 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 103, up on April’s result of 99.75. Anything less than 100 indicates a contraction.

Constraints reported were 67% markets, 17% production capacity and 17% skilled staff.

Staff numbers for May decreased year on year by 1.53%.

“Generally this survey reports an overall improvement, other than employment growth and domestic sales. This is a break from the declining trend established over recent months. The large jump in exports was due to concentrated increases rather than a broad based increase. A big improvement in sentiment will be off the back of the fall in the exchange rate. It is too soon for most to see any material fiscal improvement but things sure feel better.” says NZMEA Chief Executive John Walley.

“We can only hope the fall continues to a fair value and stays there, however few really believe that will happen, but for now, take what you can while it is going.”

“The experience of recent times is well established, other than the possibility of prudential intervention by the Reserve Bank not much has changed systemically, house prices and property asset speculation remain as a structural problem and political step too far.”

“Fundamentally, the currency is an unfettered hostage to events and remains a lottery. Remember not too long ago commentary had the USD NZD cross at 90 cents. Don’t expect too much investment while this structural problem remains.”

“Recent Statistics New Zealand data showed the value of exported goods decreased by 7.8% year on year in May. GDP figures for the March quarter showed an increase of 0.3% on the previous quarter, with manufacturing showing a very modest increase of 0.2% however machinery and mechanical appliance exports, which are a significant part of elaborately transformed classification, have been falling since the third quarter of 2011.”

“Generally, elaborate manufacturing has not grown over the last decade. This needs to change in order to increase our economic complexity and general wealth; becoming less diverse and less complex and relying more on primary production is not a recipe for sustainable economic success.“

“As always it is important that to focus on the underlying trends in the numbers, rather than latching on to single results as a sign of growth or decline.”

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tags: survey, manufacturing, confidence, turnover, sales, business survey, exports, staff

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