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Is the edge getting closer?

Is the edge getting closer?

Confidence softened although overall performance improved in our survey of Canterbury manufacturers completed in NOVEMBER. On balance the middle ground went south but the number of those strongly optimistic increased a little.

“The marginally optimistic were blown away with the southerlies. Net confidence reported in NOVEMBER was +6 down from +35 in our survey completed in OCTOBER.” said John Walley, CEO of the Canterbury Manufacturers' Association, "We are not back on the negative trend that we saw for most of 2002 but confidence has softened.”

Overall dollar sales increased for the month of OCTOBER by around 3% on OCTOBER 2001, with domestic sales up about 6% and export sales down by about 0.4%. “A bit of a bounce back for the domestic sector and exports closer to past performance,” said Mr Walley. “Anticipated sale and profits seem to be weaker, dragging down sentiment.”

Staff numbers have shown a decrease of around 1% on the same period last year. In the survey completed in NOVEMBER our net leading indicators - staff, investment, profitability and turnover all fell sharply reversing the indication in our survey completed in OCTOBER. "Perhaps there is a feeling that the long anticipated medium term reversals are ever more imminent, and of course we had a spot of bad weather in November,” said John Walley.

From the constraint standpoint, market conditions were up at 65% from last month at 55% with staff constraints falling to 5%, the lowest for over a year. Capacity was cited as a constraint by 20% of the respondents. Capital appeared for the first time at 10% of respondents.

"Key problems reinforced international terrorism, consumer confidence in the USA, the ever appreciating cross rates on the Australian and US dollar.” said John Walley

“Accelerating economic growth has to remain the pressing agenda item for New Zealand. Business as usual simply will not work,” said John Walley. “Policies that promote and encourage value added exports from our small to medium sized companies are badly needed. Hope is not really an effective substitute for action, we have to avoid the growth issue slipping off the agenda.”


Survey of Business Conditions
OCTOBER 2001 compared with OCTOBER 2002
SAMPLE SIZE: As the Survey respondents represent approximately 17 percent of manufacturing employment and a similar percentage of local production, this indicates trends in Manufacturing in Canterbury
CHANGE OVER 12 MONTH PERIOD (The table below represents the above returns expressed as percentages)
Oct Sept
TOTAL TURNOVER: Export /Domestic ratio 37/63 41/59
% Change in Total Turnover INCREASED 3.27 -4.16

DOMESTIC TURNOVER: % of respondents reporting a rise 36 36
% of respondents reporting a fall 57 63
% of respondents reporting no change 5 0
% Change in Ave Domestic Turnover INCREASED 5.58 -2.11

EXPORT TURNOVER: % of exporters reporting a rise 40 54
% of exporters reporting a fall 40 36
% of exporters reporting no change 22 9
% Change in Average Export Turnover DECREASED -0.39 -6.93

STAFF NUMBERS: % of respondents reporting a rise 33 47
% of respondents reporting a fall 27 31.58
% of respondents reporting no change 38 21.05
% Change in Average Staff Numbers DECREASED -1.10 -5.32
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%)
Profitability 10 (25) 10 (10) 15 (20) 40 (20) 25 (25)
Cashflow 10 (20) 5 (20) 25 (25) 25 (30) 35 (5)
Exchange Rate 5 (5) 32 (25) 26 (45) 21 (15) 16 (10)
Investment Plans 10 (11) 15 (5) 30 (37) 30 (37) 15 (11)
Sales Forecast 0 (0) 20 (0) 30 (35) 35 (50) 15 (15)
Profit Forecast 5 (10) 15 (5) 35 (35) 30 (35) 15 (15)
Staffing Levels 0 (0) 26 (10) 53 (35) 5 (30) 16 (5)
Confidence Very Negative5 (5) Negative21 (10) Neutral 42 (35) Positive 21 (40) Very Positive11 (10)
Constraint Production20 (30) Skilled Staff5 (15) Capital10 (0) Market65 (55)

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