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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9/8/16

Sales Flat for Manufacturers, but Positive Future Expectations


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during July 2016, shows total sales in June 2016 decreased 0.43% (year on year export sales decreased by 0.53% with domestic sales decreasing by 0.17%) on June 2015.

In the 3 months to June, export sales decreased an average of 1.5%, and domestic sales increased 5.5%. The NZMEA survey sample this month covered NZ$305m in annualised sales, with an export content of 70%. Net confidence fell to 20, down from 33 in May.

The current performance index (a combination of profitability and cash flow) is at 99, down from 102 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 99, down from 101 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 105.33, up on the last result of 104. Anything over 100 indicates expansion.

Constraints reported were 53% markets, 33% production capacity and 13% skilled staff. A net 20% of respondents reported productivity increases for June. Staff numbers for June increased 0.17% year on year.

Supervisors, tradespersons and, managers, professional/scientists reported a moderate shortage and operators/labourers reported a minor shortage.

“Year on year export sales experienced a slight fall, after a modest increase in May, leading to an average monthly fall of 1.5% in the last 3 months. Domestic sales are flat in June, though significantly lower than the nearly 14% year on year increase last month that led growth for manufacturers. These results gave a monthly average growth of 5.5% for domestic sales in the last 3 months.” Said Dieter Adam.

“The index and sentiment measures this month show some falls on last month, with the confidence measure down from 33 to 20, and both the performance and change index moving into contraction. However, in contrast to this, the forecast index moved even higher than last month, staying in expansion. Despite current pressure on sales and sentiment, manufacturers still have a positive expectation of the future – hopefully this eventuates into stronger sales results throughout the rest of 2016.

“Production capacity is becoming more of an issue for manufacturers, with the constraint reaching the highest level since February 2015. The market constraint increased on last month – the currency remains overvalued and well above expectations.

“It was great to see the Reserve Bank of New Zealand (RBNZ) propose more lending limits in the housing market to promote financial stability against building private debt, and the Auckland Unitary Plan appears to be a solid step forward needed to increase the supply of housing. We hope this gives the RBNZ the confidence to follow through on their talk and start to move our exchange rate on the much needed downward correcting trend.

“There were also a number of comments regarding challenges competing with low cost, low quality imports into New Zealand, which may be adding to pressure on domestic sales. As we have seen in the steel industry, this is an area which needs to be watched to ensure Kiwi consumers are protected and manufacturers are operating in a fair environment.“ Said Dieter. 

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tags: survey, exports, manufacturing, sales, housing, auckland, staff

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