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Sales Still Growing, Confidence Still Falling

29 November 2004 IMMEDIATE RELEASE

Sales Still Growing, Confidence Still Falling


The latest Canterbury Manufacturers’ Association Survey of Manufacturers completed during November 2004 shows total sales in October 2004 were up over 9%, domestic sales increased about 1.6% and export sales increased by nearly 19% on October 2003.

“Again, sales increased but confidence dropped to the lowest we have seen in 2004. Domestic sales growth dropped back with export sales growth remaining strong,” said John Walley, Chief Executive of the Canterbury Manufacturers’ Association. “Overall sales are strong, margins are thin, and confidence is bleeding away even in the face of some improved returns from sales in Australian dollars.”

“Whilst some respondents report very strong markets, others see the future very differently – in the latter group, comments on Free Trade Agreements, China (RMB peg) and import pressure predominate.”

“Our net leading indicators for profit, sales, investment and staff continue the downward trend evident for most of 2004.”
“Increasingly, the market is being identified as the major constraint by our survey; this indicates that local firm issues – staff, capacity and capital – are fading as conditions in the wider economy and markets weaken. That said, there are a growing number of comments indicating an intention to lift prices over the next few months.”
A net confidence of zero, down from 7 last month, shows the trend for 2004 seems to be a progressive erosion of confidence.
Staff numbers were up about 1%; the skilled staff situation remains tight but seems to be easing a little.
Around 76% of respondents indicated market conditions as the major constraint; finding staff a problem for 6%, with capacity an issue for 18%.

CANTERBURY MANUFACTURERS' ASSOCIATION

Survey of Business Conditions – October 2003 compared with October 2004

SAMPLE SIZE: The Survey respondents represent elaborate transformed manufacturers with annual sales of approximately $723 million.

CHANGE OVER 12 MONTH PERIOD
(The table below represents the above returns expressed as percentages)
Oct Sept
TOTAL TURNOVER: Export /Domestic ratio 49/51 46/54
% Change in Total Turnover INCREASED 9.32 17.19

DOMESTIC TURNOVER: % of respondents reporting a rise 53 64
% of respondents reporting a fall 33 21
% of respondents reporting no change 13 14
% Change in Ave Domestic Turnover INCREASED 1.59 12.21

EXPORT TURNOVER: % of exporters reporting a rise 72 70
% of exporters reporting a fall 9 30
% of exporters reporting no change 18 0
% Change in Average Export Turnover INCREASED 18.72 23.72

STAFF NUMBERS: % of respondents reporting a rise 52 20
% of respondents reporting a fall 29 60
% of respondents reporting no change 17 20
% Change in Average Staff Numbers INCREASED 0.93 -3.06

CHANGE OVER 12 MONTH PERIOD
(The table below represents the above returns expressed as percentages. Last month in brackets.)

Large Fall
(Over 15%) Modest Fall
(2.5%-15%) No Change
(Within 2.5%) Modest Rise
(2.5%-15%) Large Rise
(Over 15%)
Oct Sept Oct Sept Oct Sept Oct Sept Oct Sept
Profitability (YoY) 18 8 0 8 47 38 12 31 24 15
Cashflow (YoY) 18 0 18 8 35 38 6 31 24 23
Exchange Rate (YoY) 18 15 29 23 35 46 12 8 6 8
Investment Forecast 18 21 18 7 24 14 24 50 18 7
Sales Forecast 6 7 6 7 35 29 34 43 18 14
Profit Forecast 18 7 6 7 47 43 12 21 18 21
Staffing Forecast 6 7 6 7 53 50 24 21 12 14
Confidence Very
Negative Negative Neutral Positive Very
Positive
6 14 24 14 41 36 18 21 12 14
Constraint Production Skilled Staff Capital Market
18 29 6 21 0 0 76 50

Net Confidence Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
2003 +24 +21 +12 -11 -5 +12 -6 0 +11 +40 +29 +33
2004 +5 +19 +41 +41 +36 +50 +12 +20 +7 0

ENDS

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