Triumph of hope over experience?

Triumph of hope over experience?

Performance improved and confidence eased only a little in the Canterbury Manufacturers' FEBRUARY survey. Against all the indicators and uncertainty in the world only employment numbers fell on a year on year basis. The potential for war and the ever appreciating dollar do not seem to have significantly dented confidence or performance - yet.

Sales in JANUARY 2003, when compared to JANUARY 2002, increased some 13.8%. Confidence polarized with the optimists almost winning out. "Strong sales growth, particularly export, seems to have been the factor,” said John Walley, CEO of the Canterbury Manufacturers' Association. “Net confidence reported in FEBRUARY was 22, slightly down from 24 in the survey completed in JANUARY."

Export sales increased for the month of JANUARY 2003 by 23.61% on JANUARY 2002 and domestic sales were up by over 10.7%. "All our leading indicators show strong positive intentions." said John Walley. "Perhaps people continue to hope for the best in spite of expectations and experience, right now hope is winning out."

For the third month in succession staff numbers decreased, this month by 4.2% on the same period last year. “We are still seeing comment on staff shortages in specific trade and technical areas.” said John Walley.

Constraints were identified as market conditions 56%, capacity 28% with skilled staff at 11% and investment at 6%. "Some respondents are reporting early signs of the international technology sector recovery while others identified some a fall in consumer confidence locally," said Mr Walley.

"The continued strength of the NZ$ against the US and Australian dollar was mentioned by many respondents. Other concerns were compliance costs, electricity pricing and short term security of electricity supply triggered by reports of lower lake inflows," said John Walley. "The greater buying power of the NZ$ is also amplifying price pressure from imports for local manufacturers.”

"New Zealand needs a growing and effective manufacturing export sector if we are to have any show of improving living standards. The significant and rapid excursions of the kiwi dollar can destroy in one year export markets that have taken a decade to build," said John Walley. "There has to be a better way, or will the price of Auckland houses forever set the agenda for NZ monetary policy?"

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