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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6/6/14

Sales up, sentiment mixed


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during May 2014, shows total sales in April 2014 increased 4.93% (year on year export sales increased by 12.83% with domestic sales decreasing 1.71%) on April 2013.

The NZMEA survey sample this month covered NZ$440m in annualised sales, with an export content of 49%.

Net confidence was at 16, up on March’s result of 0.

The current performance index (a combination of profitability and cash flow) is at 87.7, down from 101.7 in March, the change index (capacity utilisation, staff levels, orders and inventories) was at 98, down from 101 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 105.17, up on March’s result of 104. Anything less than 100 indicates a contraction.

Constraints reported were 68% markets, 21% production capacity and 11% skilled staff.

Net 26% of firms reported a modest fall in productivity for April.

Staff numbers for April increased year on year by 2.08%.

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

“We again see year on year domestic sales decreasing, while export sales improved off a low base a year ago. Confidence recovered slightly back up to 16 from 0, while performance and change indexes indicate contraction. Staff numbers stayed with the small positive trend,” says NZMEA Chief Executive John Walley.

“The high exchange rate featured in many comments, and the pressure is evident by the market constraint increasing to 68% from 53% last survey, as well as the large fall in the performance index, which takes into account profitability, cash flow and the effect of the exchange rate on margins. The cross rate with Australia received special mention by many, cutting margins and increasing competition. The longer this continues, the greater will be the negative impact on future investment, innovation and competitiveness of manufacturers. Recent comments by the Reserve Bank of New Zealand suggested they would intervene if the right opportunity arose, although this has yet to eventuate.”

“The 2014 Budget was much as expected and offered little for the traded sector, other than some modest increasing in funding in certain areas, such as NZTE. The focus stayed on reaching Government surplus, rather than any particular effort aimed at correcting our negative external balance.”

“To this point the tradable sector has seen initiatives from Labour in regard to specific policy and more generally a revised Policy Targets Agreement that would add the external balance in conjunction with inflation as policy targets. We hope to see much more debate in these areas prior to the election.”


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tags: survey, exports, manufacturing, sales, confidence, reserve bank, performance, exchange rate

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