The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during September 2015, shows total sales in August 2015 decreased 7.57% (year on year export sales decreased 3.18% with domestic sales decreasing 13%) on August 2014.

The NZMEA survey sample this month covered NZ$460m in annualised sales, with an export content of 58%.
Net confidence fell to 5, down from 12 in July.

The current performance index (a combination of profitability and cash flow) is at 111, up from 107 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 99, up from 97 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 106.67, down slightly on the last result of 107.33. Anything over 100 indicates expansion.

Constraints reported were 71% markets, 19% production capacity and 10% skilled staff.
Net 4% of firms reported a modest rise in productivity in August.
Staff numbers for August increased 1.31% year on year.

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

“The survey this month was mixed, with year on year sales falling in August after recent increases in July, however performance and forecast indexes still show a positive result,” says NZMEA Chief Executive Dieter Adam.
“The number of respondents reporting a rise or fall in sales is evenly split, however the final result is effected by the larger fall in the Oil and Gas markets, both domestically and internationally.”

“Manufacturers and exporters are showing increases in profitability and cash flow from a combination of efficiencies, the lower exchange rate and good management. There are also encouraging signs with investment plans, sales and profit forecasts and average selling prices all still in positive territory and continuing the recent upward trend.”

“The trend for sales over recent months is one of uncertainty, and this is a reflection of the generally negative trends showing in the New Zealand economy overall, with annual GDP growth slowing and a larger Balance of Payments deficit. We need to recognise the importance of manufacturing as a stabilising factor against the negative impact on export returns and GDP when commodity prices are in decline.”