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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26/8/13

High Value Manufacturing Article - Introduction


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The following is an article written by NZMEA President Brian Willoughby. He is writing a series of articles based on interviews with various high valued added manufacturers in New Zealand. These articles originally appear in BNZ Chief Economist, Tony Alexander’s monthly newsletters.

www.tonyalexander.co.nz

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Over the next 6 months I will be submitting an article for Tony Alexander’s regular monthly emails. From the start I would like to say thank you for this opportunity to share with you insights into the world that our manufacturers and exporters operate in.

These articles were sparked from a forum thread I started; asking for views on what is it about New Zealand’s business environment that is preventing us from reaching the country’s true potential in economic performance. Can improvement be spurred by a top-down vision, led by Government? Or must this be bottom-up, with businesses taking it upon themselves to create change and innovate? Also raised was the question as to why does New Zealand have such a large proportion of our University graduates leaving? How does this affect manufacturers who require highly skilled staff?

I believe it is becoming more apparent around the world that a strong manufacturing base is crucial to the success of a modern economy. Manufacturing is more than production; it incorporates the whole process, from the idea and design, to final production, distribution and sales, adding value while supporting growth in other sectors. In many western economies manufacturing has been allowed to wither away. Some influential commentators contend that this is an inevitable consequence of a country’s development, wherein activity in services eventually grows to become more important in an economy than manufacturing. Indeed examples of this happening are praised as smart use of the best skills in both the economy losing the production work and the economy that gains it. I think that over the next twelve months you will see the foolishness of this thinking and come to an understanding of the effect of this on our ‘Real Economy’.

Much of New Zealand’s manufacturing is world class in quality and innovation, and this is what allows the sector to compete in global markets. As the President of the New Zealand Manufacturers and Exporters Association (NZMEA), along with my own experience in the area I am privileged to mix with the entrepreneurs, trades people, engineers, scientists and sales people that make all this possible. Personally, I have a shareholding interest in and run two manufacturing companies; one a Christchurch based engineering firm producing metal components, mainly for high tech companies, the other a high end audio company, which exports to more than 40 countries. These two businesses are humble endeavours compared to others we are fortunate to support but you will see similarities in the problems and opportunities we have in common; perhaps the scale of the issues being the only real difference.

Over the next 6 months I am going to interview business leaders from the high value added manufacturing, to share their views and stories. In doing this, I hope to create a more truthful and clearer picture of what firms in the sector face; what are their difficulties? What are their successes? What really needs to happen to provide growth and innovation in New Zealand? Is it the climate for investment that prevents the economy reaching its potential? Or is it the exchange rate that is holding back growth?

We all view the world from the hill on which we are standing, so clearly my view is one where manufacturing is of vital importance to any country’s economy. Further, no developed economy can earn enough to provide the living standards we feel entitled to, the health systems, the education opportunities and the rich variety of job opportunities we want for our youth unless it has a vibrant manufacturing sector in its economy. I’ll leave it to Tony to provide his perspective on that view, from the hill he is standing on.



tags: tony alexander, brian willoughby, manufacturing, exports, high value manufacturing, value added

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