A survey of New Zealand business conditions shows while manufacturing export sales dropped in 2015; domestic manufacturing sales increased despite a moderate lack of tradespersons, supervisors, managers, labourers and scientific professionals.
A New Zealand Manufacturers and Exporters Association (NZMEA) Survey completed during January 2016, shows total sales in December 2015 decreased 2.84% (year on year export sales decreased by 10.76% with domestic sales increasing 9.02%) in December 2015.
The NZMEA survey covered NZ$226m in annualised sales, with an export content of 45%. Constraints reported by those firms surveyed were 76% markets, 12% production capacity and 12% skilled staff.
A net 12% of businesses in the survey reported a modest rise in productivity in December and staff numbers increased 0.36% year on year.
“Domestic manufacturing sales have bounced back up, after two months of flat results. Conversely, it appears some exporters are going through a period of weaker demand over the last few months – this may reflect a more uncertain global environment,” says NZMEA Chief Executive Dieter Adam.
“Accompanying this was a reduction in all of the index measures. However, all three stayed in expansion mode,” says Adam.
“The forecasting index, which indicates investment, sales, profit and staffing expectations, remained high at 107.33, coming off the back of the most positive result recorded since 2004 in November (110.67) – there remains a fair chunk of optimism for the future,” he says.
“The Reserve Bank of New Zealand (RBNZ) chose to hold the OCR at 2.5% last week. Further easing would be helpful to the manufacturing and exporting sector, to boost growth, and better align our interest rates with those around the world,” says Adam.
“It would also help continue our currencies downward correction – this week saw a 3c rise against the US$ despite more dairy price falls,” he says.
Adam notes that last weeks Overseas Merchandise Trade release by Statistics New Zealand did show some brighter results for exporters than the NZMEA survey.
“Export values for electrical machinery and equipment manufacturing improved 9% in the previous month and 11.5% year on year, while logs, wood, and wood article production increased 25.1% from last month and 13.8% year on year,” says Adam.
