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The phones are ringing less often….

28 Sept 2004
The phones are ringing less often….

The Canterbury Manufacturers’ Association Survey of Manufacturers completed during September 2004 shows overall sales in August 2004 were up over 8%, domestic sales increased by 22%, and export sales fell by around 6% compared to August 2003.

“Confidence bounced back, the ever robust domestic economy held up sales overall but export sales are now demonstrating a falling trend. Fears have solidified around the close-to-all-time-highs of the New Zealand dollar against the Australian dollar which is having a major impact on the returns manufacturers are seeing from the Australian market,” said John Walley, Chief Executive of the Canterbury Manufacturers’ Association. “Expect the current account deficit to blow-out over the next half year.”

“A significant majority of respondents are reporting strong domestic sales and almost half are reporting weakening export sales. ‘We are as busy as ever but our lead times are approaching normal levels’ and ‘the phones seem to be ringing less often’ were some of the comments made in this survey.” “We continue to see reports of material cost increases driven by global demand, mostly China sucking in raw materials. The squeeze between input costs and reduced returns from export markets is beginning to bite.” “Net confidence lifted to 20, up from 12 last month, showing how the strength of the domestic market is holding up sentiment in the face of real pressure in the Australian market for many exporters.”

“The Executive of the Canterbury Manufacturers’ Association was pleased to see the volatility in the Australian exchange rate receive some attention as priorities and key projects in the latest RBNZ Statement of Strategic Intent.”

“Staff numbers reversed recent trends and increased about 6.5%. Comments in the survey suggested finding staff, whilst a problem, is generally a little easier.” Our leading indicators for sales, profits and investment weakened in this survey, however staffing intentions did indicate some improvement.

Around 38% of respondents indicated market conditions as the major constraint; finding staff a problem for 25%, capacity an issue for 31%, and capital for 6%.

ENDS

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