Business News

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during October 2015, shows total sales in September 2015 increased 3.28% (year on year export sales increased by 0.06% with domestic sales increasing 12.1%) on September 2014. The NZMEA survey sample this month covered NZ$314m in annualised sales, with an export content of 71%. Net confidence rose to 23, up from 5 in August. The current performance index (a combination of profitability and cash flow) is at 102.3, down from 111.0 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 97, down from 99 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 104.83, down on the last result of 106.67. Anything over 100 indicates expansion. Constraints reported were 77% markets and 23% skilled staff. Net 38% of firms reported a modest fall in productivity in September. Staff numbers for September increased 0.35% year on year. Tradespersons, supervisors, managers, professional/scientists and operators/labourers all reported a moderate shortage. “Export sales were flat in September, reporting no real change on the same month in 2014, although there were improvements on last month’s fall of 3.18%. Domestic turnover bounced back into year-on-year increases, at 12.1%, a stark difference to August’s decrease of 13%. This month represents some positive turn-around from a downward trend in recent months, but manufacturers and exporters are clearly still facing a lot of volatility. “says NZMEA Chief Executive Dieter Adam. “Staff numbers were also flat in September and changes in sentiment measures were mixed. Confidence improved on last month, from 5 to 23 in September, while the performance, forecast and change index measures all saw reductions from their values in August. “The only reported constraints were markets, moving up higher to 77%, and skilled […]

The Reserve Bank of New Zealand (RBNZ) chose to hold the OCR at 2.75% today, though signalling further reductions may be required to reach their inflation target. Economic risks remain, and continued work from Government and business is needed to rebalance our economy towards high value-added, diverse exports, say the New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive Dieter Adam says, “Another cut in the OCR could have helped better align our interest rates with the rest of the world and help move our exchange rate back down its correcting path. Unfortunately we have seen our exchange rate move in the wrong direction recently, as described by the RBNZ “the exchange rate has been moving higher since September, which could, if sustained, dampen tradables sector activity and medium term inflation. This would require a lower interest rate path than would otherwise be the case”. “It remains important that our currency continues on its rebalancing trend, helping exporters to regain ground in markets after the extended period of an unsustainable exchange rate. “This week’s merchandise trade deficit came in larger than expected, due to increased imports and lower export values, largely fuelled by the fall in dairy prices and volumes. However, it was encouraging to see mechanical machinery and equipment continue recent positive trends in export values; improving 3.6% on last quarter, and increasing 6.6% on the same quarter last year. “As a country we need to continue to rebalance our economy away from investment in unproductive assets and towards a more diverse, value-added export economy that allows us to pay our way in the world and improve all New Zealanders quality of life. This requires both helping commodity producers move up the value chain, as well as encouraging and supporting higher-value, highly-skilled manufacturing and exporting businesses that build […]

by Gilbert Peterson For the past six years New Zealand’s innovation landscape has been littered with dithering and waste as the country’s investment in science and R&D failed to rise to an average OECD performance. With that in the background this week’s announcement of the new ‘National Science Strategy’ and Building Innovation plan, must surely be Minister Steven Joyce’s last shot at gaining traction in this the economy’s weakest performing, and most critically exposed area. The launch of the new way forward for science and innovation is at least as important, if not more so than the announcement of the TPP agreement though totally eclipsed by it. But the question remains: Will the new approach prove the most efficient and effective way to move science investment and its commercialisation significantly forward? Science and Innovation Minister Joyce deserves congratulations for hearing what business and the science community had to say, and coming up with a plan to address their concerns. For the first time I can recall the minister articulated clearly the economic value contribution made by science and R&D to the nation. In launching Building Innovation he said: “Successful innovation improves competiveness, increases our output, drives productivity growth, and creates successful exports by introducing new or improved products, processes, or methods into the economy.” Bravo for that. Our future prosperity depends on innovation and the science and R&D that underpin it. The chief economist of the Ministry of Business, Innovation and Employment, Roger Proctor, spelled this out in a blog earlier this year. In answering the question, ‘Where does income growth come from?’ he said it comes from increases in productivity that occur when new things are produced that people are willing to pay more for than they cost to produce, and by producing new things we already produce with […]

The partnership between rugby league’s national sports team, the NZ Kiwis, and international fluid transfer products and services provider, Pirtek has been a positive and successful one for both. Since joining forces with the Kiwis prior to their first Rugby League World Cup win in 2008, Pirtek has expanded its business, opening new franchises in New Zealand and overseas. At the same time, the Kiwis have turned their wins in key finals (2005 Tri Nations, 2008 RLWC, 2010 Four Nations) into an unbeaten run through the 2014 Four Nations tournament, backing it up with a win, their third in a row against Australia, in an historic rain-delayed test match in Brisbane in May. NZRL CEO Phil Holden says of the sponsorship, “The Pirtek name has become synonymous with rugby league and the Kiwis. We have a very close relationship that benefits both parties. We are fortunate to have such a supportive sponsor family and Pirtek is an integral member of the group. “With the tour to the UK later this year, the Pirtek name on the Kiwis jersey is a store window for Pirtek, as they look to cement their place further in the international market.” The Pirtek business which was founded by a New Zealander has been successfully implemented in Australia, New Zealand, China, Singapore, South Africa, USA, France, Netherlands, Germany, the United Kingdom, Mongolia and Canada. One of the key features of the partnership is the fantastic grassroots support provided by Pirtek and their franchisee network around the country. They have contributed to a number of grassroots development initiatives, provided scholarships to allow players to attend elite development programmes and funded the Volunteer Recognition programme. The programme acknowledges volunteers each month culminating in two major presentations at the NZRL Annual Awards. Fans of the game also receive a […]

Catherine Beard, Executive Director of ExportNZ says it is a huge relief for New Zealand exporters that the Trans Pacific Partnership deal has reached a positive conclusion, despite not getting all we wanted from dairy access. “It is important to remember the significance of the TPP opportunity.” “TPP represents around 40% of world GDP – and our businesses need equal access to those huge markets. New Zealand has more to gain from TPP than most countries because the highest tariffs apply to primary products, which are around two-thirds of our goods exports.” “New Zealand has been trying for years to get competitive access to big markets like the US and Japan, and TPP will open those doors and allow our exporters to compete. ” “TPP will eliminate tariffs on 93 per cent of New Zealand’s exports to the United States, Japan, Canada, Mexico, and Peru, and for that result our negotiators and Trade Minister Groser must be congratulated.” “If we want to have diversified exports – both goods and services, to participate in global value chains and to spread our risk geographically we cannot afford to sit on the side-lines of these sorts of deals.” “Fortress New Zealand is not an option. The world has moved on, business is internationally connected and increasingly borderless and New Zealand needs to be involved”.

The EMA says confirmation that agreement has been reached on the Trans Pacific Partnership is an outstanding achievement. While New Zealand has had to compromise in some areas, the overall result will deliver significant benefits for our economy, says Kim Campbell, CEO, EMA. “This has been a long time coming and it is a momentous occasion to see this get over the line. I have strongly advocated that it’s much better to be part of the deal, than not,” says Mr Campbell. “We look forward to seeing the detail of the agreement. Our negotiators and Trade Minister Groser are to be congratulated on finalising this transformative deal. Overall, we believe this is a significant move for our members, particularly our manufacturing sector. “Like all trade deals, we are confident that as the TPP matures it will contribute positively to New Zealand’s ongoing prosperity. “We already have good free trade agreements with both China and ASEAN, and most recently the Republic of Korea deal was passed. Agreement on the TPP is a significant addition to our suite of trade deals,” says Mr Campbell. The ASEAN agreement is due for review this year, and the Regional Comprehensive Economic Partnership (RCEP) is currently being negotiated. Work is underway on a New Zealand and European Union agreement, as Europe remains New Zealand’s third largest export trading partner and a leading source of imports.

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 […]