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Manufacturing statistics very disappointing

Warren Kyd

MP for Hunua


Opposition Manufacturing & Small Business Spokesperson

13 September 2000

Manufacturing statistics very disappointing

New Zealand's manufacturing sector is finding the going tough, Opposition Manufacturing and Small Business Spokesperson Warren Kyd said today

"Since the election and the implementation of controversial ACC and Employment legislation, manufacturers have made a conscious decision not to invest in themselves.

"Rising interest rates and tumbling business confidence have driven capital expenditure down a staggering 21.5% from the June 1999 quarter. We're just not seeing extra investment in plant and machinery."

Mr Kyd was commenting on Statistics New Zealand's Economic Survey for the June 2000 quarter released today, which showed the smallest increase in manufacturing sales since December 1998.

"It's disappointing that the increase has been driven by rising prices, particularly within the petro-chemical industries, rather then production increases. What's more, when the inflationary effects are removed, the volume of sales actually fell by 0.6%.

"Today's survey also shows that with the falling New Zealand dollar, manufacturers' margins are being squeezed. While manufacturing output prices have risen 1.4% in the last quarter, input prices have risen more sharply, increasing by 1.7%."

Mr Kyd said consumers would be the ones who feel it in the hip pocket, when manufacturers and retailers are forced to increase prices to regain their margins.

"Alarmingly, the total value of goods in stock is at the highest level since December 1990. This puts pressure on the production process as manufacturers will be questioning how much they need to produce over the coming months."


ENDS

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