Sales bounce at year end

Sales bounce at year end

3 February 2012

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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during January 2012, shows total sales in December 2011 increased 5.27% (export sales increased by 15.4% with domestic sales decreasing 0.47%) on December 2010.

The NZMEA survey sample this month covered NZ$515m in annualised sales, with an export content of 40%.

The net confidence was 10, similar to November’s result of 11.

The current performance index (a combination of profitability and cash flow) is at 104.5, down from 106 in November, the change index (capacity utilisation, staff levels, orders and inventories) went down to 100 from 104 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 104.75, up on November’s result of 104.25. Anything less than 100 indicates a contraction.

Constraints reported were 90% markets and 10% production capacity.

Staff numbers for December decreased year on year by 4.27%.

“A pickup in sales and reasonable index and confidence numbers indicate a more positive end to 2011,” says NZMEA Chief Executive John Walley. “The problems caused by an overvalued exchange rate and the debt crisis in Europe have not gone away, but sales are continuing despite the problems.”

“A year that brought a lot of bounces and troughs has ended with a bounce. With persistent problems at home and abroad it is likely that 2012 will confront similar uncertainty.”

“Markets were the main constraint reported for 90 percent of respondents indicating that concerns in Europe, and to a lesser extent the United States, are weighing heavily. There are also concerns that Asian and Australian growth may slow. Market concerns have now grown for the last four months.”

“A trending decline in staff numbers indicates there is little confidence in long-term prospects.”

“Some respondents in Christchurch have also noted that staff are leaving as a result of the earthquakes. The pre-Christmas aftershocks will not help this trend.”

“Exchange rates continue to be the major threat reported by manufacturers with many increasingly frustrated with the inaction from the Government and officials.”

“Unfortunately the year has opened with the Government persisting with the ‘there is nothing we can do, the problem is elsewhere’ line. The message from manufacturers and exporters is that other countries have taken measures to protect their own and New Zealand must do the same.”

“2012 must see an end to Government indifference towards the export sector.”

The New Zealand Manufacturers and Exporters Association survey gathers results from members around New Zealand. It provides a monthly snapshot of manufacturers and exporters’ sales and sentiment.

ENDS

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