Manufacturing takes a hit

Manufacturing takes a hit - 3 May
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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during April 2013, shows total sales in March 2013 decreased 13.86% (export sales decreased by 12.65% with domestic sales decreasing 14.85%) on March 2012.

The NZMEA survey sample this month covered NZ$520m in annualised sales, with an export content of 46%.

Net confidence fell to -50, down from the -27 result reported last month.

The current performance index (a combination of profitability and cash flow) is at 92.5, down from 100.5 in February, the change index (capacity utilisation, staff levels, orders and inventories) went up to 99.0 from 98.0 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 97.0, down on February’s result of 100.5. Anything less than 100 indicates a contraction.

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

Staff numbers for March increased year on year by 0.91%.

“Despite all the recent talk of economic recovery, we are still seeing manufacturing struggling, with significant decreases in both sales and confidence.” says NZMEA Chief Executive John Walley.

“The high dollar continues to be the biggest problem for exporting manufacturers, directly hitting their state of mind, margins and turnover.”

“It is clear that in the manufacturing export sector, recovery and growth are some way off.”

“On a positive note, employment is holding up and the trend for domestic sales is moving out of contraction.”

“Statistics New Zealand data shows that although total exports are increasing, the simply transformed and elaborately transformed manufacturers have decreased both year on year and since last quarter. We need to focus on these sectors to create a more successful, innovative and diverse economy, rather than build yet further reliance on primary production and processing.”

“The RBNZ has, yet again, acknowledged the New Zealand dollar to be overvalued, and yet again we see no new thinking on how to take action to correct this.”

“It seems to be an easy choice to ignore the dollar and look to property interests.”

“A recent NZ Heavy Engineering Research Association survey indicated that the mind-set with their members is changing from growing business, to finding a sustainable viable business model.”

“For exporters it is boiling down to a choice between close up or move offshore, either way it is bad news for New Zealand jobs.”

ENDS

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