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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21/1/15

Low inflation allows for OCR cut


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Today’s CPI release by Statistics NZ showed low inflation pressure, with a fall of 0.2% in the December quarter and a rise of 0.8% for the year ended December. This low inflation means the Reserve Bank of New Zealand (RBNZ) could cut the OCR to support growth and help with our overvalued exchange rate, say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “With annual inflation below the target band (between 1% and 3%) and below expectations, there is room for a cut in the OCR. This will help move our interest rates closer to the rest of the world, which will take some pressure off our “unjustified and unsustainable” exchange rate (as the RBNZ has repeated many times); helping to make our exporters and import competing manufacturers much more competitive, fuelling growth, employment and investment.”

“The world is not what it was in the middle of last year. We have been of the view that the OCR rise last July would not have happened had it been delayed even to September. Much of the world is facing issues with persistent low inflation – a risk that needs to be considered in New Zealand around Monetary Policy alignment.”

“Concern around the housing market remains, particularly in Auckland, and this could pose a financial stability risk - we encourage the RBNZ to continue to look at other tools to tackle this issue. Without such tools, the tradable sector will continue to bear the brunt of this through an overvalued currency brought about in large part by interest rates out of step with the rest of the world. Tradable inflation fell 0.8% in the December quarter and fell 1.3% for the year, non-traded inflation rose 2.4% for the year."



tags: inflation, ocr, interest rates, manufacturing, exports, housing

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