The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during January 2014, shows total sales in December 2013 increased 2.02% (year on year export sales increased by 17.09% with domestic sales decreasing 14.0%) on December 2012.

The NZMEA survey sample covered NZ$383m in annualised sales, with an export content of 59%.

Net confidence was unchanged on November, at 30. The current performance index (a combination of profitability and cash flow) is at 101.7, down from 104 in November, the change index (capacity utilisation, staff levels, orders and inventories) was at 103, down from 104 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 103.67, up on Novembers result of 102.83.

Anything less than 100 indicates contraction. Constraints reported were 70% markets and 30% production capacity. Net 30% of firms reported a modest rise in productivity for December.

Staff numbers for December fell year on year by 2.25%. There was a moderate staff shortage reported for tradespersons, operators/labourers, supervisors and managers and a minor shortage for professionals/scientists.

“We have seen more positive export sales over the last few months, on the back of a generally negative trend throughout 2013. In contrast, domestic turnover has been negative over recent months, as compared to a generally positive trend in 2013,” says NZMEA Chief Executive John Walley.

“Our indexes had mixed results this month, but all three remaining in positive territory, while confidence was unchanged.”

“It was good to see the Reserve Bank of New Zealand (RBNZ) resist OCR increases; currency should be the major worry and interest rates, based on past experience, will have to go a long way to dent asset markets.”

“The LVR policy appears to be having some direct effect, and may give the RBNZ more room to delay increasing the OCR while other countries move their monetary policy towards more normal settings. We would like to see the further use of prudential tools, as a way to target asset inflation and protect financial stability without driving yet more deflation into the traded sector via an ever higher exchange rate. It will be hard to rebalance our economy without some new thinking in this regard.”