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An urgent summit this Friday aims to tackle what organisers say is a deepening jobs crisis. The Engineering, Printing and Manufacturing Union (EPMU) says the summit is being held in response to a string of recent manufacturing redundancies and a trades drain, as more New Zealanders move to Australia for work. Unions, economists and business and political leaders will attend, including Green Party co-leader Russel Norman, Labour finance spokesman David Parker and New Zealand First leader Winston Peters. EPMU national secretary Bill Newson said the summit showed there was an emerging consensus that the Government needed to take a more active role in the economy. “No one who has seen the mass redundancies of recent months or the numbers of Kiwis heading to Australia can be unaware of the deepening jobs crisis in this country and the need for a new approach.” Mr Newson said the hands-off approach to the economy was broken and the Government needed to step up and support the manufacturing sector and the jobs it provided. “There are alternatives, and as a country we need to discuss them. This summit is about bringing together the new consensus and we welcome anyone interested in the future of our country to join us in planning a new way forward.” The summit comes after Mr Parker was (Sunday) critical of the Government’s response to the record numbers of New Zealanders heading to Australia. He said an analysis of Statistics New Zealand figures for the year to August 2012 showed when unemployment rates peaked in the first quarter of this year, so too did the number of young New Zealanders migrating to Australia. “National claims that the record numbers of Kiwis heading to Australia isn’t their fault; it’s because our neighbours are doing so well. But a close look at […]

Steven Joyce is peddling manufacturing make-believe, wrongly claiming the sector has been growing for the past two years, says Labour’s Economic Development spokesperson David Cunliffe. “Steven Joyce is living in a dream world on manufacturing. Today he said ‘the manufacturing sector has been growing in the past two years’. That’s factually incorrect: the manufacturing index has been in negative territory for a quarter of that time. “We’ve seen 40,000 manufacturing jobs lost since 2008, when National came to power. We’ve seen massive layoffs in Kawerau, Huntly, Spring Creek, Tiwai Point, Christchurch and South Auckland. “More jobs are said to be on the line at Mataura Freezing Works, Glenbrook Steel, Tiwai point and others. “Yet Steven Joyce wrongly claims the sector is booming. Misusing labour force statistics can’t hide the reality being faced by thousands of Kiwi families. “The Government won’t go into bat for our exporters and manufacturers. Labour will. We know Kiwis need a strong manufacturing sector to create good jobs that pay a decent wage. We will work with industry and provide the right policies to get manufacturing moving. “The essential reasons manufacturers are struggling are the overvalued New Zealand dollar, an anti-growth tax framework that rewards speculation over manufacturing, and an absence of government strategy for industry sectors and regions. “Steven Joyce says our dollar is high because our economy is strong. The hundreds of jobs being lost week after week disprove his fantasy theory. If the currency reflected the strength of the economy, businesses would be performing and hiring, not firing. “The Minister just glosses over real world problems with glossy brochures that he calls a growth agenda, and name-calling anyone who disagrees with him. “The global economic authorities that he is blindly dissing include the OECD, IMF and Nobel laureates like Joseph Stiglitz, as well […]

Options to deal with the exchange rate, such as the Green Party’s recommendation to start quantitative easing, need to be explored say the New Zealand Manufacturers and Exporters Association (NZMEA). Quantitative easing is one of a number of measures that could be used to remove pressure on the exchange rate and a debate is needed on how these can be best used. NZMEA Chief Executive John Walley says, “It is clear that New Zealand’s exchange rate is the key problem behind our poor export performance, and the resulting job losses we have seen over the past couple of months. Any denial of this problem is simply economic negligence.” “The quantitative easing Russel Norman described over the weekend is one of the options that are being used overseas to deal with exchange rate competitiveness. Spending the money directly into the earthquake rebuild and building foreign reserves are both worthy objectives but they are different issues – it is worth noting that those who say printing money is a problem are happy to borrow and pay interest on money printed by other central banks.” “There are other options available to deal with the exchange rate and protect the real economy; Switzerland offers a good example here.” “It is true that a lower exchange rate will mean higher petrol prices and more expensive imports in general, but sooner or later a flat line economy means no jobs, and therefore, no flat screen TVs.” “That is essentially the choice that confronts us.”  

  The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during September 2012, shows total sales in August 2012 decreased 2.75% (export sales increased by 10% with domestic sales decreasing 12.9%) on August 2011. The NZMEA survey sample this month covered NZ$580m in annualised sales, with an export content of 50%. Net confidence remained about level moving from -11 last month to -10 this month. The current performance index (a combination of profitability and cash flow) is at 102, down from 104.5 in July, the change index (capacity utilisation, staff levels, orders and inventories) went down to 100 from 101 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 101, down on July’s result of 103. Anything less than 100 indicates a contraction. Constraints reported were 90% markets and 10% skilled staff. Staff numbers for August increased year on year by 2.4%. “We have seen the impact of long run problems in the economy over the past couple of months,” says NZMEA Chief Executive John Walley (pictured). “We have seen some firms reach a tipping point due to the continued affects of a high NZ Dollar.” “At a wider level the general theme of comments is that while many firms are able to tread water with the currency this high there are very few investing in future development. This will be a longer term slow growth or contraction story.” “Sales continued to bounce around in August with export sales increasing year on year and domestic sales falling. With conditions remaining poor for manufacturing exporters this low to zero growth and volatility is expected by many to continue for the foreseeable future.” “Index numbers were down on last month but an increase in staff numbers is a welcome positive.” “Respondents […]

  -Nick Inskip Between April and early September 2012, Chinese Domestic steel prices dropped by almost 20%. With lower input costs, Chinese manufacturers gained a significant advantage in quoting on orders for export, further harming New Zealand’s domestic manufacturing base which has yet to fully recover from the effects of the global financial crisis (GFC). The downturn in the domestic price for steel in China came as oversupply coincided with a slowdown in their economy, which by any standard is still growing strongly. But prices for domestic steel in China are beginning to rise again with the prospect of some reduction in their input advantage. The Chinese Government’s National Development and Reform Commission, which is charged with the role of economic planning, has announced a range of new stimulus projects that are estimated to be worth more than CNY 1 trillion (NZ$ 190Billion). This is approximately a quarter of the stimulus package the Chinese announced in response to the GFC in 2008, and represents their level of concern at slowing growth. As a small economy, New Zealand manufacturers are impacted by our low level of domestic growth and by the penetration into the domestic market of cheap imports. For New Zealand manufacturers to have a level playing field, they should also have similar support from Government through demand created by stimulus. But that is not enough; if they are to compete on an equal basis, the stimulus needs to be earmarked for local manufacture. We often hear about trade agreements preventing government from preferentially supporting local manufacturers. It is hard to believe that any of the NZ$190 Billion the Chinese are spending in their latest stimulus package will be open to tender from New Zealand manufacturers. So what New Zealand manufacturers are fighting against is an unfairly tilted playing field, […]

Politicians’ lamenting the latest job losses while at the same time proposing to pass a law that imposes more costs on business – by Mondayising Waitangi and ANZAC Days – does not make sense, says the Employers and Manufacturers Association (EMA). “Actions speak louder than words,” EMA’s Employment Services Manager David Lowe told the Transport and Industrial Relations Select Committee this morning on the Mondayising proposal. “Mondayising these days is simply legislating a holiday. Where do people think the money to pay for extra holidays will come from?” “Waitangi and ANZAC days are commemorative days and will be celebrated on the day they fall regardless. “Some businesses do support the Mondayisation – mainly tourism that benefits from a long weekend, and owner-operators who get a day off too. “But the large majority of employers do oppose the law and are frustrated at those who wring their hands in angst over job losses and then vote for laws that make matters worse,” he said.