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New manufacturing report shows move to added value

Hon David Parker

Minister for Economic Development MEDIA STATEMENT

17 April 2017

New manufacturing report shows move to added value

Key parts of manufacturing are moving beyond commodities into value-added products, a new report released today by Economic Development Minister David Parker shows.

The 150 page report, Beyond Commodities: Manufacturing into the Future, is the most comprehensive on New Zealand manufacturing to be published in a decade.

It was launched at the Manufacturer’s Forum hosted by EMA, in association with the Manufacturer’s Network and Callaghan Innovation.

“This report shows the huge diversity of manufacturing in New Zealand, from core household goods like cleaning products, to building products, furniture and steel,” Mr Parker says.

The report also identifies a number of challenges for manufacturers, including difficulty finding skilled tradespeople and a lack of scale relative to international competitors.

“The continued lack of productivity growth remains troubling and limits opportunities for development,” Mr Parker says.

“Manufacturing is crucial to boosting jobs and growing our exports, particularly where New Zealand enjoys a comparative advantage. The sector’s potential is clear and we need to devote more of the country’s resource it.”

“The Government’s Tax Working Group and reforms we are making to the Reserve Bank Act are important steps on the path to a more productive economy.”

A key finding in the report is the degree to which production and export of high-value products is starting to gain real traction. Medical equipment, pharmaceuticals and agritech machinery and systems collectively generate $1 billion of exports. Infant formula and innovative foods such as nutraceuticals are generating double digit growth.

The report, part of the Sectors Reports Series, confirms that manufacturing will continue to play a major role in the economy, particularly in the regions.

Manufacturing provides 221,000 jobs, generates $36 billion in exports, and spends $670 million on research and development.

“Manufacturing has borne the brunt of changing global dynamics and these changes have resulted in increased competition for Kiwi firms.

“However, the globalised economy has also increased opportunities for local firms to target valuable niches,” Mr Parker says.

“Value-added products can offer higher returns and efficiencies for New Zealand businesses and allow for more productive land use with a lower impact on the environment.”

The report will help provide the information government and industry needs to adapt to emerging domestic and global opportunities.

The report is available at: www.mbie.govt.nz/manufacturing

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