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BusinessNZ has greeted the latest employment survey with cautious optimism. The Household Labour Force Survey for the March quarter shows employment up 1.7 percent, with 38,000 more people employed since the last quarter. The unemployment rate is down from 6.8 percent to 6.2 percent. BusinessNZ Chief Executive Phil O’Reilly says the results should be treated with caution as the figures can bounce around between quarters, but the underlying trend is positive. Canterbury is showing strong growth in employment as expected, and most regions outside Canterbury are also recording increases. The trend for youth employment is also positive, with a 2 percent increase in employment; however the overall numbers of young people not in employment, education or training is still far too high, Mr O’Reilly said.  “The figures overall send a message that it is important to continue to focus on policies that promote a strong economy and business confidence, so businesses – in particular small and medium businesses – continue to create jobs.  “With regard to youth employment, the need for a focus on young people gaining employable skills is paramount. It is critically important for our schools, families and education and training systems to make this our highest priority,” Mr O’Reilly said.      

The Reserve Bank of New Zealand (RBNZ) has admitted to intervening in currency markets responding to the appreciation of our currency, say the New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive John Walley says, “It is good to see the RBNZ make some moves to lower our currency, but they can do much more than “take the top off the rallies”. The sharp drop in the currency across the board shows just what action from a central bank can do. If the RBNZ were to commit to a more long term set of actions to bring down the currency, we would see a sustained effect on the dollar. This could be achieved through a co-ordinated mix of currency intervention, monetary policy and other macro-prudential tools.” “We consistently reference the example for the Swiss Central Bank using the infinite capacity of a central bank to place and enforce a currency ceiling.” “The Reserve Bank of Australia (RBA) has also cut a further 25 basis points off its cash rate to a record low 2.75%. They are taking action against the appreciation of their currency.” “Much of Australia’s recent economic success has been built on the back of their strong natural resource based businesses. Now their exporting sector is struggling, largely due to strength of their currency.” “Why is this important for New Zealand? Australia has been a bright spot for exporters in recent times; meaning businesses exporting to Australia for Australian consumption have been doing okay, compared to those selling into the U.S and Europe. The RBA takes action to lower the pressure on the AUS$ and places upwards pressure on the NZ$; this will hurt New Zealand exporters.” “We are pleased to see the Reserve Bank of New Zealand (RBNZ) commit to putting new tools into place for […]

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during April 2013, shows total sales in March 2013 decreased 13.86% (export sales decreased by 12.65% with domestic sales decreasing 14.85%) on March 2012. The NZMEA survey sample  covered NZ$520m in annualised sales, with an export content of 46%. Net confidence fell to -50, down from the -27 result reported last month.  The current performance index (a combination of profitability and cash flow) is at 92.5, down from 100.5 in February, the change index (capacity utilisation, staff levels, orders and inventories) went up to 99.0 from 98.0 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 97.0, down on February’s result of 100.5. Anything less than 100 indicates a contraction.  Constraints reported were 90% markets and 10% production capacity. Staff numbers for March increased year on year by 0.91%. “Despite all the recent talk of economic recovery, we are still seeing manufacturing struggling, with significant decreases in both sales and confidence.” says NZMEA Chief Executive John Walley. “The high dollar continues to be the biggest problem for exporting manufacturers, directly hitting their state of mind, margins and turnover.” “It is clear that in the manufacturing export sector, recovery and growth are some way off.” “On a positive note, employment is holding up and the trend for domestic sales is moving out of contraction.” “Statistics New Zealand data shows that although total exports are increasing, the simply transformed and elaborately transformed manufacturers have decreased both year on year and since last quarter. We need to focus on these sectors to create a more successful, innovative and diverse economy, rather than build yet further reliance on primary production and processing.” “The RBNZ has, yet again, acknowledged the New Zealand dollar to be […]

  Senator Kate Lundy, Minister for Sport, Multicultural Affairs and Minister Assisting on Industry & Innovation, officially opened the Austech and National Manufacturing Week exhibitions on Tuesday 7th May at the Melbourne Convention and Exhibition Centre.  

Since the release of the NZ Power proposal there has not been a solid, logical debate about what NZ Power might mean, and the current problems inherent in the electricity market say New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive John Walley says, “What we witnessed this month in New Zealand politics reminded me of a line from Bob Edlin in Management Magazine a few weeks ago, Bob said “If scorn is better than robust debate at shaping good policy, we are in good hands. ” That pretty well summed up the Government’s response to the NZ Power proposal from Labour and the Greens. Business New Zealand has urged Labour and the Greens to revoke the policy in an open letter. The letter reads to say that higher electricity prices would better serve New Zealand businesses incentives to innovate. Would this really be the case? These are echo’s of the comments made by the same group before the unbundling the local loop.”  “Sadly scorn, distortions and exaggerated characterisations, heaped on ideas and individuals seem to be an ingrained response from many; dismissing any new ideas at odds with the status quo.” “Take a look at http://en.wikipedia.org/wiki/New_Zealand_electricity_market you don’t have to read very far on that link to see there is already a single regulator that balances supply, demand and price. Not very different than NZ Power as we read the proposal. The key difference is the pricing mechanism, not the entire system. “Currently we have a Long Run Marginal Cost approach (LRMC), where the regulator balances the market in terms of supply and demand and pays all generators according to the highest cost generator required to supply in the market. Prices escalate based on the cost of new generation and fuel; higher electricity prices justify ever higher prices […]

More New Zealand workers are employed in highly skilled jobs than in any other type of work, new analysis from Statistics New Zealand shows.  The Household Labour Force Survey information shows that over one-third of workers in the December 2012 quarter were in jobs categorised into the top of five skill groupings. That compares to one in six people in the lowest skilled grouping.  The analysis shows the number of people in highly skilled jobs has increased by approximately 60,000 since 2009, mainly due to growth in the number of jobs in the health, professional, and agricultural industries. The number of people employed in highly skilled jobs differs by age and ethnicity, but that men and women work equally in both the most highly skilled jobs. Economic News also explores New Zealand’s direct investment relationship with Australia, and the effects that the global financial crisis had on whether companies chose to reinvest their profits, or return them to their overseas parent companies as dividends. We look at how company behaviour differs between the banking and corporate sectors, and how this has changed over time. Australian-owned banks, for example, reinvested most of their profits back in to New Zealand during 2011 and 2012, while corporates returned most of their profits to their parent companies in Australia as dividends.        

A group of leading business organisations has sent an open letter to the Labour and Green parties (attached) urging them to withdraw their electricity policy. BusinessNZ, EMA, the Chambers of Commerce and others say the policy would harm jobs, growth and investment, causing interest rates to rise, reducing KiwiSaver retirement savings and making people less well off. BusinessNZ Chief Executive Phil O’Reilly says it is unusual for business to seek the withdrawal of party policies, but this particular policy if implemented would cause widespread damage.  “Subsidies and state control are not the right answers to the issue of electricity pricing. While sounding superficially attractive, such policies would in practice destroy investment and jobs.”  The signatories to the letter offer to work with the Labour and Green parties to help increase public understanding of the operation of the electricity market and in ensuring consumers have better choice as the electricity market becomes more competitive. “More price competition – rather than damaging price controls – is needed to drive down electricity prices,” Mr O’Reilly said.