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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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25/3/15

Currency damages exporters


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The high New Zealand Dollar continues to hurt our exporters and import competing producers; continued high levels are not sustainable, say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “We have seen record highs against the AU$ and Euro, while the TWI remains close to highs felt last year, despite some relief against the US$ - overvaluation and high volatility damages manufacturers and exporters.”

“The Reserve Bank of New Zealand (RBNZ) continues to express concern, like a broken record, around the ‘unjustified and unsustainable’ level of our currency, but there has yet to be any real action to address the issue. Bill English was also reported saying the high dollar was a ‘headwind for exporters’ saying 'it does create a bit of pressure in the short run for our exporters’ but overall there is little empathy for the export sector from Government, despite their long-standing goal to increase exports.”

“While businesses can hold on for a time under difficult conditions as an overvalued and volatile exchange rate eats away at margins, this can’t go on forever - deferred investment from low returns damages future competitiveness, innovation, employment and their ability to operate successfully from New Zealand.”

“To put this in perspective, in the past week I have heard from two very different manufacturers who are considering the relocation of operations offshore due to the chronic currency problem. This represents nearly 1000 good jobs we just can’t afford to lose.”

“The RBNZ needs to find a way out from between the rock of inflating house prices and the hard place of an overvalued currency; the expansion of macro-prudential intervention offers a solution.”

“We are still of the view that there is room for the RBNZ to cut the OCR this year if inflation remains low and more measures are taken to slow house price inflation, by both Government and the RBNZ. This could bring our interest rates closer in line with the rest of the developed world and put our tradable sector in a better position to thrive with a more balanced exchange rate.”

“We are pleased to see the RBNZ consult on creating a new asset class for residential investment mortgages, both to better reflect their risk, which is higher than owner-occupied mortgages, and to prepare for the potential introduction of macro-prudential tools.” 



tags: exports, manufacturing, import competing, rbnz, macroprudential, exchange rate, ocr

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