The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during November 2013, shows total sales in October 2013 increased 14.82% (export sales increased by 36.52% with domestic sales decreasing 4.96%) on October 2012.
The NZMEA survey sample this month covered NZ$490m in annualised sales, with an export content of 57%.
Net confidence rose to 18, up from the 0 result reported last month.
The current performance index (a combination of profitability and cash flow) is at 103.7, up from 98.3 in September, the change index (capacity utilisation, staff levels, orders and inventories) was at 103, up from 100 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 103.5, up on Septembers result of 102. Anything less than 100 indicates a contraction.
Constraints reported were 73% markets, 18% production capacity and 9% capital.
Net 27% of firms reported an improvement in productivity for October.
Staff numbers for October increased year on year by 0.35%.
There was a moderate staff shortage in each of the five areas measured: operator/labourers, tradespersons, supervisors, professional/scientists plus managers.
“This month is generally more positive on last month, exports are up against a falling trend throughout 2013 and domestic sales have turned south against a positive trend since the middle of the year.” says NZMEA Chief Executive John Walley.
“Our indexes have improved on last month and staff numbers are continuing their small but positive trend.”
“It is too early to tell whether this improvement in export sales will continue, commentary is mixed and the depreciation of the Australian dollar and movements in the American dollar are not helping.”
“Other data has been showing general economic improvement particularly for the domestic economy, and for exports this largely relates to commodities for China. Non-commodity exports to other markets are a more difficult story, market constraints are clear and competition is increasing as others, say from Europe, look to sell in Australia and other countries as Europe struggles.”
“Our economy is feeling good in parts, but if you are an exporter of elaborate products the positive may just be that things are not as bad as they have been.”
“The LVR debate continues, but it is too early to be definitive but hopefully this policy will directly deal with asset price inflation, allowing the Reserve Bank of New Zealand (RBNZ) to hold off OCR hikes.”
“The Reserve Bank of Australia has reiterated its contrasting stance to RBNZ, looking towards lowering their cash rate, while RBNZ still looks set to increase our OCR next year. This difference will add to the further pressure on the cross rate problem for exporters selling to Australia.”