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Ask not for whom the bell tolls…

26 August 2005 IMMEDIATE RELEASE

Ask not for whom the bell tolls….

The latest Canterbury Manufacturers’ Association Survey of Manufacturers completed during August 2005, shows total sales in July 2005 were up marginally at 0.15%, (export sales up 4% and domestic sales down about 4.2%) on July 2004.

The Canterbury Manufacturers’ Association survey sample this month reported around NZ$583m in annualised sales, with an export content of 53%.

“Total sales on a par with last year, little profit on slightly increased export sales and a trend of falling domestic sales have all worked out to feeling much the same as last month” said John Walley, Chief Executive of the Canterbury Manufacturers’ Association. “On top of that the NZ dollar bounced and blowing the sugar off what might have been better export returns.”

“Net confidence at -13 help on the levels seen last month toward the levels seen in early 2005 but still down on last year.”

“Building and construction report strong demand, although some supply lines are indicating falling demand and other signals show that the rate of penetration by trade from Asia is accelerating. This is supported by our ever-increasing trade deficits with Thailand, Singapore and of course, China.”

“We should get little comfort from trade deficits hitting levels last seen in New Zealand in the late 70’s post-Britain’s entry in to the EC. Escalating oil prices and the pervasive impact that will have on the cost of most things; transport now and petrochemicals in a few months will only serve to put more pressure on the deficit growth.”

“Staff numbers continue to show an increase, the difficulty in finding staff in some areas is easing.”

“The headline company and job losses for the month, Debonaire Products, Abrahams Furniture and Swandri perhaps paint the future – some policies can help in this regard, it’s getting time to do something, tomorrow will be too late.”

“We commented last month that the indications are that only a few export companies are profitable right now – the bad news is that it is not “bad news” until we see job losses and closures.

The current performance index (a combination of profitability and cash flow) stands at 95 down from 97 last month, the change index (capacity utilisation, staff levels, orders, and inventories) sits at 103 up from 99 last month, the forecast index (investment, sales, profitability and staff) is at 98 down from 100 last month. Overall things are tightening and expected to get more difficult.

“Strong concerns were expressed around the increasingly fashionable tax funded vote auction. Our members would prefer to see a set of coherent tax incentives targeted to encourage and support productive investment than a lolly scramble.”

“One way or another, before it can spent it has the be earned! Without export growth one day soon we will simply not be able to buy what we want.”

Constraints focused on staff ~13% and markets ~75% and capacity ~13%. Staff numbers reported an increase in the month of just under 2%.
Net sentiment reported in this survey stood at –13, equal to last month. The year on year change stood at -25.
ENDS

CANTERBURY MANUFACTURERS' ASSOCIATION
Survey of Business Conditions – July 2004 compared with July 2005

SAMPLE SIZE: The Survey respondents represent elaborate transformed manufacturers with annual sales of approximately $583 million.

CHANGE OVER 12 MONTH PERIOD
(The table below represents the above returns expressed as percentages)
July June
TOTAL TURNOVER:
Export /Domestic ratio 53/47 43/57
% Change in Total Turnover INCREASED 0.15 -11

DOMESTIC TURNOVER:
% of respondents reporting a rise 36 44
% of respondents reporting a fall 36 37
% of respondents reporting no change 29 19
% Change in Ave Domestic Turnover DECREASED -4.02 -3.57

EXPORT TURNOVER:
% of exporters reporting a rise 40 40
% of exporters reporting a fall 60 60
% of exporters reporting no change 0 0
% Change in Average Export Turnover INCREASED 4.17 -19.42

STAFF NUMBERS:
% of respondents reporting a rise 64 69
% of respondents reporting a fall 28 19
% of respondents reporting no change 7.1 12.5
% Change in Average Staff Numbers INCREASED 1.95 6.78

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%)

July

June

July

June

July

June

July

June

July

June

Profitability (YoY)

25

24

25

6

31

41

6

24

13

6

Cashflow (YoY)

6

12

25

12

50

65

19

6

0

6

Exchange Rate (YoY)

7

12

20

24

60

47

7

12

7

6

Investment Forecast

19

12

6

0

44

47

31

24

0

18

Sales Forecast

13

12

25

29

25

18

38

41

0

0

Profit Forecast

25

12

19

29

13

12

44

41

0

6

Staffing Forecast

6

6

19

29

50

35

25

29

0

0

Confidence

Very

Negative

Negative

Neutral

Positive

Very

Positive

13

6

19

38

50

25

19

31

0

0

Constraint

Production

Skilled Staff

Capital

Market

13

6

13

18

0

0

75

76

Net Confidence Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
2003 +21 -6 +12 -11 -5 +12 -6 0 +11 +40 +29 +33
2004 +5 +19 +41 +41 +36 +50 +12 +20 +7 0 -7 +5
2005 +13 -13 -6 -25 -33 -13 -13

Index (base =100) Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Performance 105 100 99 95 95 97 95
Forecast 103 98 104 102 99 100 98
Change 104 99 101 103 100 99 103

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