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  By Tony Collins CEO,New Zealand Chambers of Commerce Northland While we have a very diverse economic profile in Whangarei and Northland, the importance of manufacturing cannot be overlooked. In 2011 manufacturing accounted for 21.3% of Whangarei’s total GDP. It was the largest contributor to the districtÕs growth and also an area where Whangarei has a significant comparative advantage. Not surprisingly, much of this manufacturing is closely related to Northland’s traditional primary industries in particular forestry and farming. The presence of Refining NZ at Marsden Point is another major contributor which may skew the overrepresentation when compared to the national average. The challenge for Northland is to widen the base of its manufacturing and lessen the dependance on a few large key businesses. Northland’s close proximity to Auckland, our deepwater port, rail connectivity, ultrafast broad band and a good supply of commercial Greenfield land, means that there is an opportunity to encourage inward investment for firms that would have traditionally considered the North Shore as their preferred place of operations. When taken into account along with a low risk of natural geological disasters, good schools, a pleasant climate and outstanding natural environment, Northland becomes a particularly attractive place to establish a manufacturing business. While it is important to continue to add value to primary products before they leave our region and the country, this does not mean that we should not also be focusing on innovative and technology based manufacturing. Several Northland companies are performing internationally in this area in a very successful manner. These companies often occupy a niche international market and operate largely unnoticed by the wider community. To grow our regional economy and increase our productivity requires innovation and the identification of those international niche markets where our comparative lack of size can actually be a competitive […]

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during October 2012, shows total sales in September 2012 increased 3.07% (export sales increased by 38% with domestic sales decreasing 18%) on September 2011. The NZMEA survey sample this month covered NZ$384m in annualised sales, with an export content of 50%. Net confidence fell from -10 last month to -33 this month. The current performance index (a combination of profitability and cash flow) is at 98, down from 102 in August, the change index (capacity utilisation, staff levels, orders and inventories) went down to 98 from 101 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 96, down on August’s result of 100. Anything less than 100 indicates a contraction. Constraints reported were 89% markets and 11% skilled staff. Staff numbers for September increased year on year by 1.7%. “You would think with strong growth in exports year on year we would be seeing sentiment follow, but as always sales are vanity, profits are sanity – and of course profitability is ruined by the exchange rate,” says NZMEA Chief Executive John Walley. “The first OCR review by the new Reserve Bank Governor produced much of the same; an overblown view of inflation pressure of the back of growth in the domestic sector. We have seen all this before.” “Meanwhile the Government is in denial of the problems facing the manufacturing sector; in denial of the policy options being used elsewhere, even claiming they don’t work when they are manifestly successful.” “This comes down to culture, if you have a do nothing mind-set doing anything is always going to be a bit too hard and you would need to think.” “Consider the Swiss decision to impose a limit on the rise […]

The report on infrastructure released today gives a transparent account of progress in this key area, says BusinessNZ. Chief Executive Phil O’Reilly says business wants good infrastructure provision as part of an integrated set of plans for advancing economic growth. “Appropriate infrastructure investment brings more certainty to the environment for business and promotes more private sector business investment. “Moreover, investing in infrastructure is good for job growth – jobs involved in the building of infrastructure assets themselves, as well as jobs generated through economic growth enabled by infrastructure. “It is encouraging to see an integrated plan for future infrastructure provision that also includes issues such as sustainability, skills training, affordable housing, facilitation for volume builders and specific needs for Christchurch’s rebuild. “Infrastructure assets are expensive and long-lasting, and if well planned and coordinated bring confidence for enterprise. “BusinessNZ suggests it would be worthwhile to review legislation that regulates infrastructure in New Zealand. “It would be useful to consider how to unlock greater levels of private investment in infrastructure and to assess whether our regulatory framework strikes the right balance between serving and protecting consumers, and incentivising appropriate levels of investment. “Given our increasingly integrated infrastructure landscape, BusinessNZ also agrees that it would be useful to assess whether New Zealand has too many industry specific regulators.”  

The Labour Party, the Green Party and New Zealand First announced in October a parliamentary inquiry into the crisis in manufacturing. The parties decided to launch the inquiry after government members of the Finance and Expenditure Select Committee last month blocked an attempt to hold a select committee inquiry into the crisis in manufacturing. All other parliamentary parties will be invited to join the inquiry. The inquiry will have a broad scope, looking both at the current crisis and the future role for manufacturing in the New Zealand economy. The parties agree that manufacturing is vital to building a prosperous future for New Zealand and reducing the flood of young people to Australia. The parties also agree that real change is needed to protect and grow manufacturing in New Zealand, and that the current National Government has failed to provide any leadership on this issue.  Unlike National, the parties are not prepared to stand by while 40,000 manufacturing jobs are lost and pretend that nothing is wrong. “The crisis in manufacturing is hammering communities from South Auckland to Bluff, from Kawerau to Greymouth. The future of our country depends on a modern manufacturing sector that creates better jobs and higher wages to keep Kiwis in New Zealand. It’s time to work together to achieve this,” said Labour Leader David Shearer. “I believe New Zealand’s future is in smart, green manufacturing with high-skill, high-wage jobs that add value to our exports. Under National’s watch, manufacturing has been decimated. We urgently need to turn that around,” said Green Party Co-leader Dr Russel Norman. New Zealand First Leader Winston Peters says he is pleased to cooperate with the inquiry into the woes facing our manufacturing and exporting sectors. “New Zealand urgently needs economic policies that support export led growth. That is the only […]

Hamilton Airport has outperformed its 2012 financial and operational expectations, announcing a 240 percent increase on last year’s net profit after tax, a 25 percent increase in EBITDA and debt reduction of $400,000 during the year. Board chair John Birch said the airport had achieved a solid result for 2011/2012 because of good planning and delivering on major projects. “The focus this year has been on containing costs, paying off debt, improving and diversifying revenue streams and maintaining customer service levels. In many of these areas we have exceeded our statement of intent targets.” He added it was unfortunate that the announcement from Virgin Australia advising it would cease operating its Brisbane route came post-balance date and overshadowed a very good annual result. “Because aeronautical revenues fluctuate, the airport has had a long-term strategy to diversify its revenue streams, with developments such as Titanium Park and long-term leases. Looking ahead to the 2012/13 financial year the income from these streams will lessen the impact of the lost international flights,” said Mr Birch. In August 2011 the airport’s joint venture property business Titanium Park sold 12 hectares of land, the entirety of the Stage One development, to internet e-commerce retailer and logistics company Torpedo7. Construction of Stage Two of Titanium Park is currently under way. Hamilton Airport chief executive Chris Doak said the improved net profit after tax of $378,000, up by $267,000 on 2011, was primarily attributed to increases in property lease revenue, cost containment and lower interest costs from a reduction in debt. He added that despite the Rugby World Cup negatively affecting Hamilton’s domestic flight numbers during September, October and November 2011, total passenger numbers were maintained at 354,000, only two per cent fewer than the previous year. Overall aircraft movements increased by 16 percent from 102,000 to […]

  New Zealand businesses need to lift their game if they want to succeed in Korea according to New Zealand Trade and Enterprise research into the perceptions of New Zealand in South Korea. “There is a pool of goodwill and trust for New Zealand in Korea,” says NZTE’s Trade Commissioner based in Seoul, Graeme Solloway. “But the latest research indicates that while New Zealand is seen as being warm and trustworthy, there is also a perception that New Zealand has stagnated in the last 10 years, and that we don’t actively seek or chase business opportunities here.” “Like many places, Korea is a complex market, with its own unique business culture, and New Zealand businesses need to take the time to understand and appreciate the way that relationships and the local business culture work here, and operate a way that resonates with Korean customers,” Mr Solloway says. The  research builds on an initial survey completed in 2008 which found that New Zealanders were perceived as being friendly but not business minded. “Overall there has been little change in the Korean perceptions of New Zealand over the past two years,” Mr Solloway says. “There is a growing perception that New Zealand businesses are ill prepared for Korea and are not stepping up to Korean business standards. If businesses can do that, there are huge opportunities here for the waiting.” The research indicates that: There is a pool of goodwill and trust for New Zealand in Korea and Koreans enjoy working and playing with New Zealanders. New Zealand businesses are seen as slow and unresponsive and Korean businesses are losing patience and have easier business options to choose from. Koreans generally have positive perceptions of New Zealand food and beverage however specific product knowledge tends to be restricted to unprocessed foods such […]