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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10/10/13

What matters most, sales or sentiment?


Print-friendly 2 comment(s) Posted in: In the media

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during September 2013, shows total sales in August 2013 decreased 5.56% (export sales decreased by 9.33% with domestic sales decreasing 1.20%) on August 2012.

The NZMEA survey sample this month covered NZ$445m in annualised sales, with an export content of 52%.

Net confidence rose to 18, up from the 9 result reported last month.

The current performance index (a combination of profitability and cash flow) is at 100.7, down from 104.7 in July, the change index (capacity utilisation, staff levels, orders and inventories) was at 102, the same as in the last survey, and the forecast index (investment, sales, profitability and staff) is at 105, up on July’s result of 104.33. Anything less than 100 indicates a contraction.

Constraints reported were 64% markets, 27% production capacity and 9% skilled staff.

Staff numbers for August increased year on year by 0.58%.

“Sales are contracting, month on month and on trend. There is a two speed situation developing, domestic New Zealand is doing better than export New Zealand.”

“That said, confidence is holding up and there were a number of positive comments from those with a strong sales bias into the domestic market. A different tone is developing from those with a large dependence on export sales with the recent rebound in the US$ cross rate.”

“More generally the numbers suggest manufacturers and exporters are still lagging behind other sectors which seem to feel a stronger improvement – a two speed economy.”

“An overvalued and volatile currency which has been down and back up again in the past quarter hurts margins over time; this is a major barrier for exporters and import competing manufacturers. The situation is not helped as it looks like New Zealand is set to be the first developed country to raise interest rates next year; this will add upwards pressure on the dollar while increasing borrowing costs.”

“We need to see more policy directed at house price inflation that seeks to avoid exchange rate pressures. Loan to value limits (LVR) have been a step in the right direction, but more could be used. Anyone remember borrowing to income limits? Such policies are an important step in protecting our financial stability.”

“The difference between the actual sales numbers reported against the sentiment measures and comments seems to be growing. We will need to watch how this develops; over reliance on sentiment measures from a feel good domestic economy has its problems.”

 

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tags: survey, sales, exports, domestic, sentiment, lvr, loan to value ratios

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1 Comment(s)



David Thompson - 31 October 2013 at 6:04 AM
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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