– Dieter Adam, NZMEA
We are coming towards the close of another year, and it’s time to reflect on how it has gone for our manufacturers. I will also take this opportunity to give some updates on changes at the NZMEA in the last year and things we hope to achieve into the next year.
Much of 2015 can be characterised with the usual volatility, both in markets and the exchange rate, which unfortunately seems to be all too normal in the current global environment. But we have also had a lot of bright spots in comparison to some recent years, notably the shift in the exchange rate, starting its long awaited correction from very high levels.
After reaching record highs in the previous year, seeing the long awaited downward trend in our currency take shape through this year came as a relief. Exporters and import-competing manufacturers have felt the pressure of an overvalued currency for a number of years, peaking against the US$ in July 2014, but our dollar has steadily dropped since then and now lies at a far more reasonable level.
Similarly for our biggest trading partner, Australia, our currency reached record highs in January of 2015, but again this has fallen back. This correction was helped along by the RBNZ cutting the OCR, better aligning our interest rates with those lower rates around the world. There are also suggestions we may see more cuts in the coming year.
This long-awaited downward trend of the NZ$ will help manufacturers be competitive, both in global markets and when competing with imports, as well as helping them claw back some margins – we hope this will help put manufacturers in a better position to invest in their businesses and innovation in the coming year, something that has not been easy particularly since the Global Financial Crisis.
Use of technology is only going to become more important to manufacturers into the future, and keeping up will require investment.
This will be important as we move into a more uncertain environment. World markets continue to be mixed, with some real opportunities, such as the continued strengthening of the US market, but some challenges, including the slow down in Australia and China, and other potential geo-political market disruptions.
New Zealand’s domestic economy is also slowing, influenced in no small part by the depressed dairy prices – time will tell how this directly feeds into demand for manufacturers, but some supplying the dairy industry have noted a slowdown in demand.
Here at the NZMEA we are looking forward to next year and how we can expand our services in ways that can best meet the needs of manufacturers and our members, and help them grow and thrive.
One recent change we have made was the introduction of our new workshop series, From the Factory Floor, which aims to connect those running manufacturing businesses in a peer learning environment on a particular topic.
I started in the role as CEO of the NZMEA in May this year and have spent a lot amount of my time since then meeting with manufacturers who kindly opened their factory doors and shared their experiences with me.
It has been an eye-opening experience to see the kind of adaptations our manufacturers have made to their businesses to stay globally competitive in an increasingly harsh market. We continue to see smart innovation at all levels – products, technical and business processes, and even wholesale changes in business models.
I suggest the time has now come for the NZMEA to do the same. We live in a highly competitive world as far as business organisations in New Zealand is concerned, and we support and represent manufacturers who are increasingly time-poor and strongly focused on only engaging in activities that tangibly contribute to their own success.
Over the next twelve months we’ll continue to critically look at our activities and what else we can do to offer support and representation that manufacturers can immediately see as adding value to their business.
– Dieter Adam, Chief Executive, New Zealand Manufacturers and Exporters Association