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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2/5/14

Confidence and domestic sales down, exports up


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during April 2014, shows total sales in March 2014 increased 12.57% (year on year export sales increased by 29.33% with domestic sales decreasing 3.05%) on March 2013.

The NZMEA survey sample this month covered NZ$403m in annualised sales, with an export content of 55%.

Net confidence was at 0, down on February’s result of 35.

The current performance index (a combination of profitability and cash flow) is at 101.7, up from February’s result of 98.7, the change index (capacity utilisation, staff levels, orders and inventories) was at 101, down from 105 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 104, down on February’s result of 107.67. Anything less than 100 indicates a contraction.

Constraints reported were 53% markets, 20% capital, 13% production capacity and 13% skilled staff.

Net productivity was unchanged on last month.

Staff numbers for March increased year on year by 0.33%.

All staff segments, tradespersons, operators/labourers, supervisors, managers and professional/scientists, reported a moderate shortage for March.

“This month showed generally more of what we have been seeing over the last few months, domestic sales falling (it is worth noting that few of our members are directly related to construction), while export sales increases, however export sales are returning little margin with an elevated currency. Net confidence fell, indexes were mixed and staff numbers increased slightly.”

“Comments were also mixed, but it is clear the exchange rate is having an effect on those supplying the domestic economy by increasing import competition, while remaining an issue for exporters.”

“The Reserve Bank of New Zealand (RBNZ) raised interest rates for the second time last week which puts further pressure on the exchange rate. The RBNZ keeps on saying that the current level of our currency is not sustainable but does nothing in that regard other than welcome the deflationary impact of an appreciating currency.”

“If the current high levels continue, the tradable sector will go on suffering for the sake of some reduction of inflationary pressures through lower import prices. Does this make sense, when the success of our tradable sector is vital to our economic future?”

“What is the message to the traded sector? Suck it up?”

“It was great to see some progress in this regard by Labour, who announced their proposed reform to Monetary Policy earlier this week. These are changes that the tradable sector needs, and in turn will have positive effects on the rest of the economy. We hope this spurs constructive discussion on the economy and the Government look at this as a possible change, rather than simply dismissing its potential.”

“A continued single minded focus on inflation with no regard for the external balance could well result in an economy struggling to function as capacity in the added value traded sector falls away.”

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tags: survey, exports, manufacturing, currency, sales, confidence, labour, inflation

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