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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Sales bounce back but still in the red, confidence improves

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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during July 2015, shows total sales in June 2015 decreased 6.42% (year on year export sales decreased by 11.49% with domestic sales decreasing 1.35%) on June 2014.

The NZMEA survey sample this month covered NZ$438m in annualised sales, with an export content of 47%.

Net confidence rose to 6, up from -13 in May.

The current performance index (a combination of profitability and cash flow) is at 102.3, up from 96.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 96, down from 100 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 103.33, up on the last result of 102.5. Anything over 100 indicates expansion.

Constraints reported were 78% markets, 11% production capacity, 5.5% skilled staff and 5.5% capital.

Net 17% of firms reported a modest rise in productivity in June.

Staff numbers for June increased 4.01% year on year.

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

“Sales in June remained in the negative, although less negative than May’s result. Domestic turnover improved significantly on last month, but remained slightly negative, while export turnover worsened somewhat on May.” says NZMEA Chief Executive Dieter Adam.

“This month sentiment was generally up, with net confidence improving back into the positive and two out of three index measures improved, with the performance index moving back into expansion. Interestingly, capital was reported as a constraint for the first time since February and the market constraint fell back on last month, potentially reflecting the recent falls in our currency, but remained significantly higher than the other constraints.

“Staff numbers for June also improved, at the highest rate since March. This weeks Household Labour Force Survey release by Statistics New Zealand showed a similar positive result for manufacturing employment, with people employed in manufacturing seeing the largest annual increase of any sector, overtaking construction which has recently led the way.

“Numerous manufacturers are reporting diversification of their businesses as an opportunity – manufacturers have continued to adapt their business models and products in response to continued volatile global conditions. Auckland and Christchurch also remain areas of opportunity for those manufacturers related to construction and infrastructure.

“Australian and European markets continue to be reported as areas of weakness. The second cut in the OCR by the Reserve Bank of New Zealand (RBNZ) was welcome news for manufacturers and exporters. While this didn’t have a direct downward effect on the currency at the time, it will help solidify the current downward trend. As RBNZ Governor Wheeler said in a recent speech, “We believe that further exchange rate depreciation is necessary given the weakness in export commodity prices and the projected deterioration in the country’s net external liabilities over the next two years”.

"We encourage the RBNZ to continue its easing stance, provided risks in the housing market are carefully considered.” says Dieter Adam.

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tags: survey, confidence, manufacturing, exports, diversification, sales, staff


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