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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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17/2/16

Currency remains uncomfortably high


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While the New Zealand Dollar (NZD) has fallen back from record highs, it remains uncomfortably high for manufacturers and exporters, particularly against the Australian Dollar (AUD), say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive Dieter Adam says, “Manufacturers and exporters have been pleased to see the currency fall back, but there is still a way to go. The NZD has reacted somewhat to today’s fall in dairy prices against some currencies, but has risen against the AUD. In recent months our currency has been failing to fall significantly, in spite of a series of dairy price decreases, reductions in our interest rates and an (albeit minor) increase in US interest rates. Unlike in similar situations of global uncertainty in the past, our dollar has also failed to respond to the recent negative sentiment and falls in equity prices globally.

“Australia is one of our most significant trading partners, and is our largest export market for mechanical machinery and equipment. Against the Australian dollar, our currency has trended upwards since 2011, where it sat in the low 0.70's.

“Staying at the 0.94c – 0.92c range against the AUD is putting pressure on our manufacturers ability to be competitive and get the margins needed to re-invest in their businesses. Manufacturers need to invest in R&D, equipment, expanding markets and employees skills to grow and stay competitive into the future.

“Manufacturers will be watching the Reserve Bank of New Zealand’s (RBNZ) next OCR decision and corresponding comments on the currency, for which they have continued to point to as uncomfortably high for some time. Inflation and inflation expectations remain low despite recent OCR cuts – we may need to start looking seriously at ways to give the RBNZ more tools and targets, to better balance outcomes for inflation, employment, growth and our currency, in a new global economic environment.

“We need the automatic stabilisers to work. A sustained overvalued currency really does affect the competiveness and success of our manufacturers and exporters over time. Successful economies are built and grow on a foundation of successful manufacturers to add value, provide export income, innovation, technical skills and well-paid employment.”  



tags: currency, exchange rate, dollar, exports, income, australia, rbnz, ocr, interest rate

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