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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Signs of Challenges for Exporters

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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during August 2016, shows total sales in July 2016 decreased 15.27% (year on year export sales decreased by 20.48% with domestic sales decreasing by 6.03%) on July 2015.

In the 3 months to July, export sales decreased an average of 6.5%, and domestic sales increased 2.6%.

The NZMEA survey sample this month covered NZ$337m in annualised sales, with an export content of 60%.

Net confidence fell to 6, down from 20 in June.

The current performance index (a combination of profitability and cash flow) is at 98.7, down from 99 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 100, up from 99 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 107, up on the last result of 105.33. Anything over 100 indicates expansion.

Constraints reported were 75% markets, 12.5% production capacity and 12.5% capital.

There was no net reported productivity increases for July.

Staff numbers for July decreased 0.15% year on year.

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

“Year on year export sales have moved from their slight fall last month, to a more significant decrease of 20.48% in July. This result solidified the downward trend shown in the 3 month moving average of export sales, now sitting at -6.5%. Domestic sales also fell in year on year terms, though to a smaller extent than exports. Year on year domestic sales fell 6.03% in July, resulting in monthly average growth of 2.6% for domestic sales over the last 3 months.” Said Dieter Adam.

“There are clearly some challenges appearing in sales terms for manufacturers, particularly in export markets. The profitability measure gained ground in the latter half of 2015, but has since been trending downward. After moving somewhat lower during 2016, the market constraint has now moved to its highest level since December 2015. This may indicate, along with falling the profitability and export sales, that the pressure of the exchange rate is building on manufacturers – our currency has trending up this year, moved up 9 cents since late 2015 on the Trade Weighted Index. The exchange rate and increased competition from imports was noted as a concern by a number of respondents.

“Confidence fell in July, along with two of the index measures, profitability and change. However, in contrast, the forecast index increased again on last month, and remains high at 107. Within the forecast index, was a strong positive result for investment plans. Despite this month’s sales results, and lower confidence, there remains a relatively positive view for the future among manufacturers.” Said Dieter.


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tags: survey, exports, manufacturing, exchange rate, currency


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