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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Expectations better than experience

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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during October 2014, shows total sales in September 2014 decreased 4.08% (year on year export sales increased by 13.54% with domestic sales decreasing 10.11%) on September 2013.

The NZMEA survey sample this month covered NZ$728m in annualised sales, with an export content of 30%.

Net confidence was at 32, up from 27 in our survey last month.

The current performance index (a combination of profitability and cash flow) is at 94.3, down from 97.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 106, up from 103 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 108.67, up on the last result of 106.67. Anything less than 100 indicates a contraction.

Constraints reported were 59% markets, 18% skilled staff, 14% capital and 9% production capacity.

Net 14% of firms reported a modest rise in productivity for September.

Staff numbers for September increased year on year by 2.14%.

Tradespersons, supervisors, managers and operators/labourers reported a moderate shortage, while professional/scientists reported a minor shortage.

“This month’s results once again follow the trend for most of 2014: improving year on year export sales, with decreasing domestic sales,” says NZMEA Chief Executive John Walley.

“Confidence improved slightly on last month, while indexes were mixed. This month saw the market constraint measure bounce back from 47% in August, to 59% in September, reflecting continued soft domestic markets and uncertainty around the currency.”

“Recent trends in our index measures have shown the performance index, which takes into account profitability and cash-flow, has consistently been in negative territory during 2014. In contrast, the forecast index, which measures expectations around investment, sales, staff, profit and wages, has remained positive through 2014, as has the change index. This reflects a general sentiment throughout manufacturers in 2014, that although current conditions and performance are relatively weak, they expect conditions to improve.”

“The currency has improved around 14% since late July, encouraged by Reserve Bank of New Zealand (RBNZ) intervention, a lower for longer OCR and the Federal Reserve ceasing asset purchases, which all helps exporters and import competing manufacturers. The improved margins that come from a more balanced currency will be important, over time, to support the investment that will fuel future growth and innovation in the sector.”

“The currency continues to be characterised as “unjustified and unsustainable” by the RBNZ and we can hope that they continue to be active in this regard.”

“The recent lower than expected inflation results will also provide more room to move on future OCR decisions, allowing rates to be lower for longer, and potentially cut in future to spur growth and help to better balance our currency.” 


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tags: survey, exports, manufacturing, performance, confidence, constraints, rbnz, currency, ocr, interest rate


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