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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5/2/16

Domestic manufacturing sales robust, but weaker exports


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during January 2016, shows total sales in December 2015 decreased 2.84% (year on year export sales decreased by 10.76% with domestic sales increasing 9.02%) on December 2014.

The NZMEA survey sample this month covered NZ$226m in annualised sales, with an export content of 45%.

Net confidence fell to 18, down from 24 in November.

The current performance index (a combination of profitability and cash flow) is at 101, down from 106 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 100, down from 103 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 107.33, down on the last result of 110.67. Anything over 100 indicates expansion.

Constraints reported were 76% markets, 12% production capacity and 12% skilled staff.

Net 12% of firms reported a modest rise in productivity in December.

Staff numbers for December increased 0.36% year on year.

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

“Domestic manufacturing sales have bounced back up, after two months of flat results and another good improvement in September. Conversely, it appears some exporters are going through a period of weaker demand over the last few months – this may reflect a more uncertain global environment. Overall we are seeing more evidence for a relatively strong domestic economy.” says Dieter Adam, Chief Executive of the NZMEA.

“Accompanying this was a reduction in all of the index measures, however all three stayed in expansion mode. The forecast index, which indicates investment, sales, profit and staffing expectations, stayed high at 107.33, coming off the back of the most positive result recorded since 2004 in November (110.67) – there remains a fair chunk of optimism for the future.

“The Reserve Bank of New Zealand (RBNZ) chose to hold the OCR at 2.5% last week, though opened up the possibility of additional easing. Further easing would be helpful to the manufacturing and exporting sector, to boost growth, better align our interest rates with those around the world, and help continue our currencies downward correction – this week saw a 3c rise against the US$ despite more dairy price falls.

"The RBNZ highlighted, “a further depreciation in the exchange rate is appropriate given the ongoing weakness in export prices.” We also agree with the RBNZ highlighting the risks of the Auckland housing market - more may need to be done to make housing affordable for workers and avoid financial stability risks that could damage the wider economy.

“Last weeks Overseas Merchandise Trade release by Statistics New Zealand did show some brighter results for exporters than our own survey – for example, export values for electrical machinery and equipment manufacturing improved 9% on the previous month and 11.5% year on year, while logs, wood, and wood article manufacturing increased 25.1% on last month and 13.8% year on year." 


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tags: survey, exports, domestic, growth, manufacturing, rbnz, exchange rate, housing, staff

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