Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Canterbury rebuild to stoke manufacturing, Wheeler says

Canterbury rebuild will rouse sleeping manufacturing sector, Wheeler says

By Paul McBeth

Nov. 28 (BusinessDesk) - The $30 billion rebuild of New Zealand's second-biggest city should help revive a lagging domestic manufacturing sector, which is typically linked to the construction industry, according to Reserve Bank governor Graeme Wheeler.

New Zealand's manufacturing output is about 9 percent lower than before the global financial crisis, much of which has come from tepid investment in construction which has sapped the domestic side of the sector, Wheeler told Parliament's finance and expenditure committee in Wellington.

That should get a kickstart as the Canterbury rebuild comes underway, which will foster investment intentions in the construction sector.

"The reconstruction of Canterbury, the investment likely to take place is more than $30 billion and spread out over several years of course, but one would expect that would be a very positive affect for manufacturing," Wheeler said.

"The main output effects for the manufacturing sector have been on the domestic sector - a lot of it has been linked to the significant decline in investment taking place, particularly residential investment in recent years," he said.

New Zealand's manufacturing activity expanded last month, having spent the five previous months shrinking, according to the BNZ-Business New Zealand performance of manufacturing index. The sector has been hit a number of high-profile job losses, the latest being Carter Holt Harvey's decision to lay off 70 staff at its Rotorua and Tokoroa plants.

That's sparked Opposition political parties to launch a parliamentary inquiry into the sector's woes outside the usual select committee process, which will be chaired by Manufacturers and Exporters Association past-president Cameron Moore.

"Any sort of ongoing decline of any sector is a concern. You would want to really analyse it carefully and see what lies behind it and whether there are policy judgements that need to be rethought," Wheeler said.

New Zealand's strong currency, which recently traded at 82.02 US cents, has been cited by manufacturers as the major reason for job losses.

Wheeler said manufacturers have been affected by the strong currency in the past three years, but "you've still seen exports grow in volume terms of the order of about 3 percent per annum."

Wheeler was appearing in front of committee for the Reserve Bank's annual report, and will face politicians next week for his monetary policy statement.


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news