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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New Lending Limits a Good Call

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Manufacturers and exporters welcome the Reserve bank of New Zealand’s (RBNZ) proposed expansion of existing Loan to Value Ratios (LVR) today – this should give them more freedom to address continued low inflation and an exchange rate that remains overvalued and challenging for exporters, say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive Dieter Adam says, “We are pleased to see this action from the RBNZ to continue to sure up the financial system against stability risks in the housing sector. We also support their efforts to look into other measures, such as Debt to Income Ratios, as another tool to protect financial stability.”

“We hope this moves gives the RBNZ more certainty to push forward with cuts to our interest rates to better align them with those in the rest of the world. Inflation remains below target and our exchange rate continues to be overvalued, well above forecasts and the Bank’s own targets – prolonged currency pressure on exporters damages their competitiveness and reduces their ability to make much needed investments for the future.

“However, we know from recent experiences that LVR limits only have a limited and temporary effect on house prices. Rising house prices and rental costs are increasingly becoming an issue for employers, including manufacturers, especially in Auckland. We increasingly hear from our members about people looking at jobs in other cities where their salary would go a lot further – adding to an already serious problem of attracting and retaining skilled workers nationwide, but especially in Auckland.

“Keeping house prices and rents in check is first and foremost the responsibility of central and local government. Government needs to find ways to boost the supply of affordable housing in areas suitable for working people, as well as tackling migration-driven demand spikes and some of the longer term tax incentives that encourage investment in existing housing stock over more productive investment. We should let the Reserve Bank focus on getting inflation in line and ensuring financial stability in our banking system, rather than overloading it with demands and expectations to influence developments beyond its current mandate.” Says Dieter.

tags: rbnz, lvr, housing, debt, manufacturing, exports, exchange rate


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