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Auckland's Business Conditions Tread Water

Thursday, August 22nd, 2002

Auckland's Business Conditions Tread Water

Manufacturers in the Auckland region are finding competition in the market hotter than ever, but they've no intentions of cutting investment, shedding staff or otherwise slackening off.

Overall the latest results from the Employers & Manufacturers Association (Northern) monthly Survey of Business Conditions for July show the confidence wobbles of last month have largely stabilized, said Bruce Goldsworthy, Manager of EMA's Manufacturing Services.

"Both export and domestic sales are back on an even keel after last month's dip," Mr Goldsworthy said.

"The percentage of businesses confident that their sales would improve has dropped back, while the numbers expecting things to get worse have improved. Last month 69 per cent expected sales to get better or stay the same, while this month 76 per cent expect sales to improve or stay the same. But the gap between the 'improvers' and those expecting sales to worsen has widened to a net five per cent negative.

"The same 'widening gap' is evident for profitability. A net 10 per cent think profit will deteriorate, though the percentage expecting profit to either stay the same or improve has picked up, from 64 per cent last month to 76 per cent this month.

"Significantly more respondents this month are saying their prices won't be going up. Those who are hold the higher costs for raw materials, and electricity, mainly to blame.

"Though capacity utilization is marginally lower, those indicating they would invest in new plant and equipment is marginally up.

"Finding skilled staff is still a problem - half the survey's respondents are finding this to be the case, with 29 per cent finding unskilled labour difficult to recruit, but that's been about the same for many months.

"The biggest change is a hefty 14 per cent increase in those finding market competition more intense. Other concerns include the exchange rate and the price of electricity."


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