Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Selling better for now

4 December 2007

Selling better for now, but concerned for the long term

The latest Canterbury Manufacturers’ Association (CMA) Survey of Business Conditions, completed during November 2007, shows total sales in October 2007 increased 8.09% (export sales dropped by 6.2% with domestic sales increasing 22.89%) on October 2006.

The CMA survey sample this month covered NZ$418m in annualised sales, with an export content of 44%.

Net confidence came out at zero, down from the 8 reported last month.

The current performance index (a combination of profitability and cash flow) is at 97, down from the previous month’s 98, the change index (capacity utilisation, staff levels, orders and inventories) increased to 104 from the previous months 101, and the forecast index (investment, sales, profitability and staff) is at 103 up on the previous month’s result of 101. Anything less than 100 indicates a contraction.

Constraints reported 17% production, 25% staff and markets 58%.

Staff numbers for September increased by just over 6.8%.

“This latest survey, and the sentiments expressed around it, say that although manufacturers report short term gains, there is still concern regarding longer term pain within the sector”, says CMA Chief Executive John Walley.

“Confidence for October slipped on September’s result, yet while domestic sales increased and export sales fell, the overall trend in sales, rather than one months result, seems to be driving sentiment. Manufacturers are reporting that they are busy at present and that they are looking ahead towards the summer months, however, serious long term worries remain”.

“The strong NZD/USD cross rate continues to be a major concern for exporters, especially the impact it is having on their customer base. Respondents are busy at present but order books are not strong with some surviving on work already in the system, or the backlog of work that has built up over the past couple of months. Tough times ahead are anticipated as holes in demand appear”.

“New Zealand companies are not just losing orders and customers to China but also management and workplace skills as well. Even as more questions are being asked regarding the quality and safety standards of so many Chinese made products, more New Zealand companies and personnel are committing themselves to China and other low-cost sources”.

“Overall, this is a survey that reflects the uncertainty facing our manufacturers and exporters at present. There has been some consolidation and minor improvements in trading conditions in recent months. The view within the sector is that the cycle might be turning, not only for manufacturers, but also the economy as a whole. The ‘China price’ effect continues to gather momentum, despite recent product safety scares, and the question now is whether the prospect of a preferential trade agreement with China will offer anything to our manufacturing exporters, or just more of the same unequal playing field that exists right now”.

CANTERBURY MANUFACTURERS' ASSOCIATION

Survey of Business Conditions – October 2006 compared with October 2007

SAMPLE SIZE: The Survey respondents represent elaborate transformed manufacturers with annual sales of approximately $418 million.

CHANGE OVER 12 MONTH PERIOD
(The table below represents the above returns expressed as percentages)
Oct Sept
TOTAL TURNOVER: Export /Domestic ratio 44/56 48/52
% Change in Total Turnover INCREASED 8.09 -9.49

DOMESTIC TURNOVER: % of respondents reporting a rise 80 36
% of respondents reporting a fall 20 45
% of respondents reporting no change 0 18
% Change in Ave Domestic Turnover INCREASED 22.89 -.60

EXPORT TURNOVER: % of exporters reporting a rise 66 30
% of exporters reporting a fall 33 50
% of exporters reporting no change 0 20
% Change in Average Export Turnover DECREASED -6.18 -17.59

STAFF NUMBERS: % of respondents reporting a rise 81 54
% of respondents reporting a fall 18 18
% of respondents reporting no change 0 27
% Change in Average Staff Numbers INCREASED 6.88 3.53

CHANGE OVER 12 MONTH PERIOD
(The table below represents the above returns expressed as percentages.)

Large Fall
(Over 15%) Modest Fall
(2.5%-15%) No Change
(Within 2.5%) Modest Rise
(2.5%-15%) Large Rise
(Over 15%)
Oct Sept Oct Sept Oct Sept Oct Sept Oct Sept
Profitability (YoY) 33 15 8 31 25 23 25 31 8 0
Cashflow (YoY) 6 0 33 31 33 46 17 15 8 8
Exchange Rate (YoY) 17 15 17 38 25 31 33 15 8 0
Investment Forecast 0 8 42 23 17 38 33 8 8 23
Sales Forecast 0 0 25 25 8 33 67 33 0 8
Profit Forecast 8 8 17 17 8 33 67 42 0 0
Staffing Forecast 0 0 17 25 50 58 33 17 0 0
Very
Negative Negative Neutral Positive Very
Positive
Confidence 0 8 33 15 33 46 33 31 0 0
Constraint Production Skilled Staff Capital Market
17 8 25 15 0 0 58 77

Net Confidence Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
2003 +21 -6 +12 -11 -5 +12 -6 0 +11 +40 +29 +33
2004 +5 +19 +41 +41 +36 +50 +12 +20 +7 0 -7 +5
2005 +13 -13 -6 -25 -33 -13 -13 -36 -27 -32 -29 -33
2006 -47 -13 -23 -29 -42 -13 -14 +8 +15 -7 40 0
2007 -17 0 -8 25 8 -17 -60 -18 +8 0

Index
(base =100) Oct
06 Nov 06 Dec 06 Jan 07 Feb 07 Mar
07 April
07 May 07 June 07 July 06 Aug 07 Sept 07 Oct
06
Performance 93 101 91.5 98 93 94 95 96 95.5 96 98.5 98 97
Forecast 101 108 102 101 101 102 105 102 102 99 102 101 103
Change 102 107 100 100 100 99 99 103 103 102 103 101 104

ENDS


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Energy Resources Aotearoa: New Law On Decommissioning Could Be Costly Overkill
A new law on decommissioning oil and gas fields passed by Parliament today has good intentions but is overkill, according to Energy Resources Aotearoa. "We strongly support operators taking responsibility and paying the costs for decommissioning, which is what all good operators do," says chief executive John Carnegie... More>>


Commerce Commission: News Publishers’ Association Seeks Authorisation To Engage In Collective Bargaining

News Publishers’ Association of New Zealand Incorporated seeks authorisation and provisional authorisation to engage in collective bargaining with Facebook and Google. The Commerce Commission has received applications from News Publishers’ Association of New Zealand Incorporated (NPA) seeking authorisation and provisional authorisation on behalf of itself... More>>


Reserve Bank: MPC Continues To Reduce Monetary Stimulus
The Monetary Policy Committee agreed to raise the Official Cash Rate (OCR) to 0.75 per cent. The Committee agreed it remains appropriate to continue reducing monetary stimulus so as to maintain price stability and support maximum sustainable employment... More>>

PriceSpy: Producer Prices Increase
New Black Friday and Covid-19 Report* released by PriceSpy says people’s fear of stepping inside physical shops during big sales events like Black Friday has risen since last year; Kiwis are still planning to shop, but more than ever will do it online this year... More>>

NZ Skeptics Society: Announce Their 2021 Awards, And Dr Simon Thornley Wins The Bent Spoon

Every year the New Zealand Skeptics presents its awards to people and organisations who have impressed us or dismayed us, and this year it’s been hard to pick our winners because there have been so many choices!.. More>>



REINZ: Sales Volumes Leveling Out

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 44 fewer lifestyle property sales (-2.6%) for the three months ended October 2021 than for the three months ended September 2021... More>>


BNZ: Auckland Retail Card Spending Bounces Back In Step Two
Bank of New Zealand (BNZ) card spending data released today shows one week of retail therapy at Alert Level 3 Step 2 has been enough to raise card spending in Auckland to levels greater than before the Delta lockdown... More>>