NZMEA Survey - Sales improve

NZMEA Survey - Sales improve

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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during June 2014, shows total sales in May 2014 increased 12.14% (year on year export sales increased by 23.42% with domestic sales increasing 2.71%) on May 2013.

The NZMEA survey sample this month covered NZ$481m in annualised sales, with an export content of 50%.

Net confidence was at 20, up on April’s result of 16.

The current performance index (a combination of profitability and cash flow) is at 95.7, up from 87.7 in April, the change index (capacity utilisation, staff levels, orders and inventories) was at 101, up from 98 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 105.33, up on April’s result of 105.17. Anything less than 100 indicates a contraction.

Constraints reported were 73% markets, 20% production capacity and 7% skilled staff.

Net 33% of firms reported a modest fall in productivity for May.

Staff numbers for April increased year on year by 5.55%.

Tradespersons, operators/labourers, supervisors and managers reported a moderate shortage for May, while professional/scientists reported a minor shortage.

“This month sees a continuation of recent trends, increased export turnover and more modest domestic improvements. Sentiment and confidence measures improved on last month, while market conditions remain the biggest reported constraint,” says NZMEA Chief Executive John Walley.

“We have had many comments around the pressure the exchange rate on manufacturers, but export sales volumes have managed to stay positive over recent months, driven by improvements by some particularly large respondents - export sales are much more mixed than the headline result suggests. There is the expectation the currency will eventually fall as the U.S and Europe recover and stop their stimulus programmes, but this is of little help to those dealing with the current sustained high levels.”

“Last week saw the release of Labour’s Alternative Budget, which presented a fairly restrained, but active budget. We were pleased to see commitment for the introduction of a Capital Gains Tax – this is important for balancing investment incentives in New Zealand, and we have heard this recommended by Treasury and the Reserve Bank.”

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