Manufacturers Confidence Lowest since April 2003

24 December 2004

Manufacturers Confidence Lowest since April 2003

The latest Canterbury Manufacturers’ Association Survey of Manufacturers completed during December 2004 shows total sales in November 2004 were up over 15%, domestic sales increased just over 21% and export sales increased by nearly 9% on November 2003.

“Again, sales increased but confidence moved in into the negative region, the lowest in 22 months. Domestic sales growth lifted and export sales growth eased. Overall sales remain strong.” said John Walley, Chief Executive of the Canterbury Manufacturers’ Association. “It’s the same story and maybe it is wearing as thin as some margins - good sales and no margin. Recent changes in the exchange rate on the Australian dollar have stripped away even that bit of good news from a month or so ago.”

“All up Santa’s sack is pretty full but once the bills have all been paid there is not much left for the balance sheet.”

“If anything, general comment has the future for 2005 looking a little brighter in the hope for a softer Kiwi dollar. Open trade agreements threaten those who target the lower areas of their markets and the rush of recent discussion around free trade agreements are a particular worry for this group.”

“Our net leading indicators for profit, sales, investment and staff have not broken the downward trend during 2004.” “The market remains the major constraint in this survey; other issues – staff, capacity and capital – are less of a worry, although still present in the capacity and to a lesser extent, staff.” Net confidence ran out at -7, down from zero last month and the lowest since April 2003. Staff numbers were up about 8%. Around 67% of respondents indicated market conditions as the major constraint; finding staff a problem for 13%, with capacity an issue for 20%.

ENDS

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