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Manufacturing needs to fire up also

Media Release: National Distribution Union
Thursday June 16, 2011

Manufacturing needs to fire up also

New Zealand needs more than just the primary production sector to fire up if we are to resuscitate the economy and boost incomes, the National Distribution Union said today.

Today's Business NZ/BNZ Performance of Manufacturing survey finding that the sector is expanding was encouraging, NDU General Secretary Robert Reid said.

"Manufacturing is the third largest employing industry in New Zealand and its success was critical to an economic recovery, and in particular one where the economic benefits of a recovery are shared."

He said that this week's attention on primary industries following Tuesday's MAF Situation & Outlook report, has highlighted that our economy is not structured so that everyone benefits when our key economic sectors do well.

"Excellent international commodity prices are helping farmers pay down debt, but it also means that New Zealand consumers are facing higher costs for their household staples like meat and dairy," Robert Reid said.

"In the past if dairy or meat did well we were able to use the global prices to subsidise the local price. That would be illegal now under our free trade laws, and it means that if prices go up, local consumers are hit, as we saw in this week's Food Price Index."

In contrast, exporters of non commodity manufactured goods are continuing to face tough times with an unfriendly New Zealand dollar, again noted in this month's Business NZ survey, and a value-added strategy that for some sub-sectors, such as wood processing, is uneconomic, Robert Reid said.

"Unless our economy is restructured to take advantage of it, when global prices rise for unprocessed or marginally processed primary products, it raises the risk of there being less value-added manufacturing locally, because the value we add can often be beaten by China or India's low wages and costs."

Robert Reid said that he hoped a proper debate on alternative monetary policy settings that supported all manufacturing exporters would be a feature of this year's election.

"Hundreds of thousands of New Zealanders working in manufacturing deserve a proper response from government, on policy settings that support their jobs, and help share economic wealth," he said.

Robert Reid also noted that manufacturing in Otago continued to contract, and feared that the impact of KiwiRail's job layoffs at Hillside in Dunedin, and company and government unwillingness to consider local procurement of rail stock, would exacerbate this situation.


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