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De-stabilising factors rattling home market

De-stabilising factors rattling home market

Consequences from the ongoing skills shortages and the sustained high level of the New Zealand dollar are destabilising the local market, reports the Employers & Manufacturers Association (Northern).

“Unease amongst New Zealand manufacturers is rising,” said Bruce Goldsworthy, EMA’s Manager of Manufacturing and Advocacy Services.

“Despite headline figures suggesting that economic growth is continuing, albeit at a slower rate than previously, we are hearing frequent reports of:

• ad hoc speculative import shipments being sold solely on price and destabilising New Zealand-made production,

• no one making money from exports as margins are decimated by the high dollar,

• skilled staff being relentlessly pursued by ‘headhunters’

• rising wage pressures overall.

“The ANZ/Business New Zealand Performance of Manufacturing (PMI) for February showed manufacturing was still in positive mode but that rate of expansion has slowed.

“Local manufacturers (who employ 293,000 New Zealanders in total) are finding the high dollar is encouraging speculators to import one- off shipments for sale on price alone thereby destabilising the local market.

“In response to the skills shortages, the high kiwi dollar and the new low pricing levels, we are now hearing of small and medium manufacturers exploring production options in Asia.

“Though exports of elaborately transformed manufactured goods for the year ended January were up 10 per cent to $9,244 million, reports from many exporters indicate they are merely trying to hold onto markets, not making any money from them.

“The labour market is working well for some employees in that many people are actively hawking their skills to the highest bidder.

“Some companies report heightened wage pressures as their staff are made wage and salary offers to which businesses feel obliged to respond or lose good employees.

“All these indicators are signalling a change coming to the demographics of New Zealand’s long established manufacturing sector on a scale not witnessed since the 1980’s.”

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