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Growth continues in April 

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during May 2015, shows total sales in April 2015 increased 14.08% (year on year export sales increased by 17.06% with domestic sales increasing 8.10%) on April 2014.

The NZMEA survey sample this month covered NZ$358m in annualised sales, with an export content of 69%.

Net confidence rose to 17, up from -5 in March.

The current performance index (a combination of profitability and cash flow) is at 100.3, up from 94.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 98, down from 100 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 105.67, up on the last result of 100.83.  Anything over 100 indicates expansion.

Constraints reported were 83% markets, 11% production capacity and 6% skilled staff.

Net 22% of firms reported a modest rise in productivity in April.

Staff numbers for April increased 3.36% year on year.

Tradespersons, supervisors, managers, professional/scientists and operators/labourers all reported a moderate shortage.

NZMEA PIC“In April, domestic sales continued on their recent trend of growth, experiencing year on year improvements.  Export sales also stayed in expansion for the second month.  However growth of turnover was at a lower rate than March for both domestic and export sales.” says NZMEA Chief Executive Dieter Adam.

“This month’s survey saw some more positive signs looking forward, as confidence improved for a second month, moving back into positive territory after two months in the negative, along with the forecast index seeing improvement, suggesting manufacturers and exporters are feeling more positive for the future than they have in recent months.  Staff numbers also felt another increase in April.

“However risks and pressures remain, the low payout in the dairy sector is starting to feed through, with lower demand effecting manufacturers supplying the industry, and while the fall back of the NZD against AUD has been welcome, it remains at uncomfortable levels for many, along with lower demand in the Australian market.  This, along with continued weakness out of Europe combined to push the market constraint even higher than March’s result, going from an already high 68 to 83 – market conditions continue to be by far the most significant reported constraint to growth for manufacturers and exporters.

“It was good to see both the Reserve Bank of New Zealand (RBNZ) and Government take some action to address risks building in the Auckland housing market – this, along with continued low inflation should give the RBNZ more room to bring down the OCR.  Bringing our interest rates closer in line with those of our competitors would go a long way in levelling the playing field for our manufacturers and exporters. Calls for cuts to the OCR have also been expressed by others, including Fonterra CEO Theo Spierings.” says Dieter Adam.

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3rd June 2025

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