We All Fall Down - CMA Survey

For Immediate Release

"We All Fall Down"

The latest Canterbury Manufacturers' Association Survey of Manufacturers completed during April 2005, shows total sales in March 2005 were down just over 3%, domestic sales down 9% and export sales increased by just over 3% on March 2004.

The Canterbury Manufacturers' Association survey sample this month reported close on NZ$647m in annualised sales, with export content at 50%. The result is an accurate indicator of the health and performance of the export and domestic manufacturing sector.

"Generally the trends are sales down, profits and staffing falling. Those in the export-manufacturing sector with no pricing power continue to have the stuffing knocked out of them" said John Walley, Chief Executive of the Canterbury Manufacturers' Association. "Longer term manufacturers in New Zealand will not be able to compete against the full onslaught of low cost Asian competition. We have some innovative, capable and productive manufacturers, but competing with low cost countries is all but impossible."

"This is not the late 1980s where tariffs created inefficiency and high costs in New Zealand. This is attacking the core capability of the New Zealand manufacturing sector. Government must come to realise that raising the dead is many times more difficult than supporting the living."

"By-in-large there is not a single New Zealand manufacturer that cannot compete with Australia or any other competitor in the developed world, however it is all but impossible to compete with low to no cost countries (when your competition uses slave labour)."

"It is worth recalling that "low cost countries" is a nice way of saying those countries that exploit their people and environment in a way that would not, for now at least, be tolerated in New Zealand."

"The mad rush to sell more milk powder to Asia, regardless of their democratic, environmental or labour standards, on the back of bilateral trade agreements is leaving New Zealand's manufacturer feeling well and truly sold out."

"Putting to one side the social and environmental issues in trade negotiations, the detail of the negotiations, technical standards, sanitary and phytosanitary, safeguards and dumping - all require surveillance and enforcement at the border. There is no point in having rules if they are not enforced. New Zealand needs to commit much more resource in these areas."

"It has been said the developed world must either innovate faster than the Chinese or match their cost structure. If our manufacturing sector dies, New Zealand will, over time, become a low cost country."

"Never mind we can all get good service jobs as our economy free-falls to match the standards of the developing world. Do we really want that?"

"Staff numbers reported a fall of nearly 5% in the month and trends continue to indicate a reduction in the numbers employed."

Sentiment in late April improved a little, up to -6 from -13 in March 04 confidence in the survey stood at +41, so the year on year the fall is the largest we have seen for a number of years.

ENDS

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