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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29/10/15

RBNZ holds OCR, challenges remain


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The Reserve Bank of New Zealand (RBNZ) chose to hold the OCR at 2.75% today, though signalling further reductions may be required to reach their inflation target. Economic risks remain, and continued work from Government and business is needed to rebalance our economy towards high value-added, diverse exports, say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive Dieter Adam says, “Another cut in the OCR could have helped better align our interest rates with the rest of the world and help move our exchange rate back down its correcting path. Unfortunately we have seen our exchange rate move in the wrong direction recently, as described by the RBNZ “the exchange rate has been moving higher since September, which could, if sustained, dampen tradables sector activity and medium term inflation. This would require a lower interest rate path than would otherwise be the case”.

“It remains important that our currency continues on its rebalancing trend, helping exporters to regain ground in markets after the extended period of an unsustainable exchange rate.

“This week’s merchandise trade deficit came in larger than expected, due to increased imports and lower export values, largely fuelled by the fall in dairy prices and volumes. However, it was encouraging to see mechanical machinery and equipment continue recent positive trends in export values; improving 3.6% on last quarter, and increasing 6.6% on the same quarter last year.

“As a country we need to continue to rebalance our economy away from investment in unproductive assets and towards a more diverse, value-added export economy that allows us to pay our way in the world and improve all New Zealanders quality of life. This requires both helping commodity producers move up the value chain, as well as encouraging and supporting higher-value, highly-skilled manufacturing and exporting businesses that build our future prosperity.

“Recent dairy price movements and weather events outline the inherent risks and limitations of competing in large commodity markets – relying on commodity exports and a house price boom cannot be our primary economic growth strategy.

“Dealing with our housing issue is a separate, but important part of this – it currently poses a threat to financial stability, while pulling vital investment away from our productive businesses. It is also limiting the options of the RBNZ – further OCR cuts could add fuel to the fire without other measures to deal with both demand and supply sides of housing.

“As well as the trade balance, our balance of payments and current account are vital measures of the health of our economy, focusing on our overall position, including trade and external debt. Unfortunately our current account deficit is going in the wrong direction and expanding. The Government's ambitious target of exports reaching 40% of GDP by 2025 would help dramatically change and re-balance our economy, but we have not yet seen any signs of the country moving in that direction and more support and forward looking strategy will be needed to achieve this target.” said Dieter. 



tags: nzmea, manufacturing, exporting, exports, currency, rbnz, ocr, tradable, diversity

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