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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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3/6/10

Survey - Export led recovery: not yet


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during May 2010, shows total sales in April 2010 increased 7.9% (export sales decreased by 5% with domestic sales increasing 19%) on April 2009.

The NZMEA survey sample this month covered NZ$563m in annualised sales, with an export content of 40%.

Net confidence fell to 46, down from 64 last month.

The current performance index (a combination of profitability and cash flow) is at 102.5, down from 103.5 in March, the change index (capacity utilisation, staff levels, orders and inventories) remained steady at 102, and the forecast index (investment, sales, profitability and staff) is at 108, up on March’s result of 107. Anything less than 100 indicates a contraction.

Constraints reported were 69% markets, 23% production capacity and 8% capital.

Staff numbers for April decreased year on year by 0.1%.

“Sales have increased on 2009, but reports have indicated that many manufacturers are suffering lower profitability despite the higher sales figures,” says NZMEA Chief Executive John Walley. “Domestic sales are continuing to grow while export sales and returns are volatile.”

“Export markets are patchy with Australia growing, the US stagnant and Europe weakening. Exporters to Europe are having a tough time due to the financial instability and the resulting fall in the Euro.”

“Staff numbers have not yet returned to growth overall, but there are reports of some firms ending short time working, adding shifts and taking on more staff.”

“Confidence and index numbers have dropped back a bit but generally reports are that things have shown improvement in 2010. The hope is that this will continue, but there is no export led recovery at this stage. So far it is an entirely domestic story and many wonder how long that can last.”

“The Monetary Policy Statement on Thursday should explicitly recognise the fragility of the recovery and that even though domestic sales are filling the hole in export markets, significant capacity remains in the economy. From a demand perspective we still have a long way to go, so there is little point in risking any recovery. The Reserve Bank can wait until September at least.”

“There has been significant disappointment expressed around the budget. The removal of accelerated depreciation in particular will be a setback to any recovery in productive investment. The lack of action around addressing bias in our fiscal policy and the inadequate replacement for the R&D tax credit compound this.”

“All in all Budget 2010 fell a long way short of any sort of step change from the perspective of the real economy.”
 

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tags: survey, sales, staff, budget, r&d, monetary policy

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