Two Sides to the Story
9 June 2008
Two Sides to the Story
The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during May 2008, shows total sales in April 2008 increased 27% (export sales increased by 56% with domestic sales increasing 10%) on April 2007.
The NZMEA survey sample this month covered NZ$426m in annualised sales, with an export content of 45%.
Net confidence increased slightly to -33, up from the -36 result reported last month.
The current performance index (a combination of profitability and cash flow) is at 98, down from the previous month’s 98.5, the change index (capacity utilisation, staff levels, orders and inventories) stayed at 100, and the forecast index (investment, sales, profitability and staff) is at 99.8, down on the previous month’s result of 101. Anything less than 100 indicates a contraction.
Constraints reported: 27% staff and markets 73%.
Staff numbers for April increased by 8.3%.
“The survey sends mixed messages regarding conditions for manufacturers and exporters. The figures show increased turnover across the board, however confidence has only improved slightly on last month. This reflects the uncertainty within overseas markets, in particular the US and illustrates the mix of general sentiment and personal experience,” says Chief Executive John Walley.
“There are divergent messages coming from the membership with domestic sectors showing positive results, however manufacturing continues to struggle due to the high US dollar, low cost imports and almost across the board cost increases. The message from the struggling industries is that Government action is long overdue to provide better policy support for the external sector, before more companies follow Fisher and Paykel offshore.”
“Companies moving their production offshore further dents confidence as complex supply chains are stressed making it harder for those that remain.”
“Difficulties with overseas markets have also been disturbing exporters. There has been little real progress on access to the Chinese market for complex products.”
“Short-term orders are holding up sales figures and the Australian cross is supporting margins for now but softening demand is causing major uncertainty amongst manufacturers and exporters.”
“A major realignment of the exchange rate will happen sooner or later but it may well be too late for some.”
“There has to be a better way.”
The Canterbury Manufacturers’ Association (CMA) has broadened the scope of its survey to include respondents throughout New Zealand. As a result, the survey will now be released by the New Zealand Manufacturers and Exporters Association (NZMEA).
See... Results (PDF)