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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OCR inflation targeting 'not optimal', time for change

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A ‘lower for longer’ message must accompany a real review of monetary policy following the release of an International Monetary Fund (IMF) report say the New Zealand Manufacturers and Exporters Association (NZMEA). The IMF report released last month rejected the notion that a simplistic single lever, single target approach is the path to growth for a small economy.

The report said that, “strict inflation targeting is not optimal, and the consequences of adverse exchange rate movements have to be taken into account.

NZMEA Chief Executive John Walley says, “The IMF has now supported practical evidence that small countries must look to control their exchange rate to promote growth and avoid battering their tradeable sectors. Hopefully we will see the ‘lower for longer’ message to address short term currency issues on Thursday, along with some reaction to the IMF’s new position.”

“In a series of presentations after the last Monetary Policy Statement, Reserve Bank Governor Dr Alan Bollard defended the inflation targeting approach to monetary policy as international best practice. In light of New Zealand’s export growth record over the past few years and the IMF’s rejection of the approach this stance needs to be reviewed,” says Mr. Walley.

“Small countries that have managed their currencies have attained considerable growth in the last decade whereas those who have left themselves vulnerable to the whims of international money markets have suffered.”

“There has been a lot of talk about how to rebalance the economy to restore higher growth rates; a more stable currency is the starting point.”

“The continued weakness of our economy justifies continued monetary stimulus.”

tags: reserve bank, imf, inflation targeting, ocr


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