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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Export growth falls, but still positive

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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during November 2014, shows total sales in October 2014 decreased 4.61% (year on year export sales increased by 1.11% with domestic sales decreasing 8.81%) on October 2013.

The NZMEA survey sample this month covered NZ$482m in annualised sales, with an export content of 45%.

Net confidence fell to 6, down from 32 in our survey last month.

The current performance index (a combination of profitability and cash flow) is at 98, up from 94.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 101, down from 106 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 107.33, down on the last result of 108.67. Anything less than 100 indicates a contraction.

Constraints reported were 53% markets, 35% production capacity and 12% skilled staff.

Net 35% of firms reported a modest rise in productivity for October.

Staff numbers for October broke trend for the first time in 8 months and decreased year on year by 2.05%.

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

“This month’s results were somewhat less positive than recent months. Total sales fell in line with recent trends, however export sales, which have been printing significant year on year improvements throughout 2014, saw only a slight increase of 1.11%,” says NZMEA Chief Executive John Walley.

“We will be looking to see if exports bounce back to their recent trend of strength over the
coming months.”

“Confidence decreased, reversing recent improvements. The performance index improved, probably indicating that the lower currency is working through to better margins of late, but still shows in contraction (below 100), while the forecast and change index both fell, but remain in expansion.“

“There have been further falls in dairy prices and terms of trade this week, but our currency remains high and fails to significantly respond. The theory has always been that the currency moves with respect to changing economic fundamentals (of which dairy prices and terms of trade are traditionally key indicators), which can help to balance some external movements – however in practice this auto-stabiliser is not working.”

“The Reserve Bank of New Zealand (RBNZ) has room to cut the OCR, as inflation remain lower than expected and inflationary pressures are falling in regard to dairy pay-out knock-ons and oil prices. This could help return our currency to fair value and take pressure off margins to exporters. Calls are growing from others for action on the OCR. Deflation is also becoming a larger concern for to the global economy. Cutting the OCR is one thing but asset prices also need to be restrained by effective macro-prudential efforts from the RBNZ; small open economies need to deal with the backwash of cheap money chasing yield.”

“In a speech early this week RBNZ Governor Graeme Wheeler talked about the need for broader macro-prudential action against asset price inflation and to complement monetary policy – we believe these are overdue and encourage RBNZ to work through to implementation in this area.“

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tags: survey, sales, staff, manufacturing, exports, domesitc, rbnz, macro prudential


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