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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October Survey

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Manufacturers still edgy

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during November 2009, shows total sales in October 2009 decreased 13% (export sales decreased by 20% with domestic sales decreasing 7%) on October 2008.

The NZMEA survey sample this month covered NZ$616m in annualised sales, with an export content of 44%.

Net confidence fell to -23, down from the -17 result reported last month.

The current performance index (a combination of profitability and cash flow) is at 98.5, up from the previous month’s 98, the change index (capacity utilisation, staff levels, orders and inventories) went up to 101 from 95 last month, and the forecast index (investment, sales, profitability and staff) is at 103.8, up on the previous month’s result of 98.5. Anything less than 100 indicates a contraction.

The reported constraints were: production 23% and markets 77%.

Staff numbers decreased year on year by 13%.

“The mood has remained fragile among manufacturers and exporters in October. Confidence and sales have remained low,” says NZMEA Chief Executive John Walley. “That said the composite index numbers suggest that improvement may not be too far away and conversations with a number of firms indicate some patchy improvements.”

“The improving index numbers reflect a feeling that conditions are improving albeit off a very, very low base. Year on year numbers are still tracking downwards but better news from overseas, an encouraging cross rate with the Australian dollar, and some repeat orders all make for a better feeling in the run up to the year end.”

“There remains a stark contrast between the non-traded and traded economies with export sales declining further than domestic sales, and the strong improvement emerging from the housing market speaks to an unbalanced and unsustainable recovery.”

“Sales and staff have now declined for a sustained period causing a wind down of capacity; this means that any short term demand then leads to capacity problem as reflected in the capacity constraint reported. Investment continues to slow and firms are reluctant to invest when the returns are so uncertain; it will take some major changes to the policy framework before exporters commit to investment and growth.”

“Manufacturers and exporters continue to be disappointed by the Government’s inaction over policy reform. The Tax Working Group and the 2025 Productivity Taskforce have discussed our poor growth record, but the Government seems reluctant to engage in the discussion at this point. One thing is certain, unless the policy framework changes, investment by those operating in the tradeable sector will continue to slow and productivity growth will continue to fall. Our climb back up the OECD rankings can only get harder the longer we wait.”

tags: survey, sales, confidence, markets, dollar


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