Business News

The manufacturing sector experienced its fourth consecutive increase in expansion levels during September, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for September was 58.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.1 points higher than August, and the second highest result recorded so far for 2014. BusinessNZ’s executive director for manufacturing Catherine Beard said that the continued upwards track of the overall result was encouraging for the sector. “Although the start of 2014 produced some healthy expansion results, activity levels recorded during the middle of the year were at a more moderate pace. The fact that the last two months have shown strong growth bodes well for the manufacturing sector as we enter the last quarter of the year.” BNZ Senior Economist Craig Ebert said “A falling trend in the NZ dollar will help manufacturers’ export revenue but will also create pressure on import costs and the servicing of any unhedged foreign-currency debt.” All five seasonally adjusted main diffusion indices were in expansion during September. Deliveries (62.4) led the way, with its highest result since July 2013. New orders (60.0) rose 1.5 points, while production (59.3) dropped 1 point, although still showing very healthy levels of activity. Finished stocks (58.1) recorded its highest value since the survey began in 2002, while employment (56.0) rose another 2.0 points. All four regions were in expansion during September. In the North Island, the Northern region (58.9) decreased 1.7 points after a large increase in expansion during August. The Central region (53.5) recovered from consecutive months in contraction to record its highest value since May. In the South Island, the Canterbury/Westland region (55.9) rose 1.2 points, while the Otago-Southland region (65.4) continued its […]

New Zealand employment confidence rose to a six-year high in the September quarter as sentiment in Canterbury bolstered the nation’s outlook on jobs, according to the latest Westpac McDermott Miller Employment Confidence Index survey. The index rose to 111.5 in the September quarter from 109.9 in the June quarter, in a measure were a number above 100 indicates optimists outweigh pessimists. The index has risen for seven consecutive quarters and is now at its highest level since September 2008, when the global financial crisis began to weigh on sentiment. It remains below its peak of 135.9 in September 2007. New Zealand’s unemployment rate fell to a five-year low 5.6 percent in the June quarter as employment growth in Canterbury fuelled the labour market. Meanwhile, businesses intended to hire more staff according to ANZ Bank’s latest business outlook survey for September, with a net 21.3 percent of businesses intending to employ more people, from August’s 18 percent. Business and consumer confidence measures have fallen in recent months on concerns the pace of economic growth is slowing, as falling dairy and log prices, the country’s largest and third largest exports respectively, and the historic strength of the New Zealand dollar weighs on export receipts. “The rise in employment confidence might seem to go against the recent run of play, with business and consumer confidence surveys falling over the September quarter,” said Michael Gordon, Westpac senior economist. “However, we don’t see these messages as contradictory. The labour market typically lags the broader economic cycle, and it is only in the last year or so that we’ve seen a marked lift in employment growth.” Employment confidence rose in eight out of 11 regions, and Canterbury returned to the position of most confident region after being overtaken last quarter by Auckland. The area is in […]

New Zealand exporters struggling to meet Chinese demand for commodities such as milk powder, logs and lamb flaps, should look to market more premium products to an increasingly worldly, wealthy Chinese consumer, according to Shanghai-based economist Mary Boyd. “Given the importance of agriculture in the domestic economy here and the success that New Zealand has had in promoting agricultural products in China it is really looking at what additional sales can be made and these may not actually come in the form of volume of goods,” Boyd said after a luncheon in Wellington hosted by the New Zealand China Council and the Asia NZ Foundation. “It could be in the form of a ‘premiumisation’ marketing effort and also extending the range of products that are sold from New Zealand,” China’s emerging middle class has helped drive New Zealand’s terms of trade to a 40-year high as the nation gained favourable access to the world’s second-largest economy following the 2008 Free Trade Agreement. China became New Zealand’s top trading partner in November last year and annual two-way trade exceeded $20 billion for the first time in May, ahead of the government’s 2015 target. Last year, New Zealand overtook Russia as the biggest exporter of logs to China, shipments of lamb flaps used in Chinese hotpots have risen to a record and dairy farmers boosted production to benefit from record milk prices driven by Chinese demand for milk powder. Analysts have said New Zealand producers are struggling to increase volumes any further to meet “insatiable demand” from China. The FTA with New Zealand, China’s first with a developed country, was “a great accomplishment” and has left the nation well positioned with its access to market, said Boyd, who works for the Intelligence Unit of The Economist and has lived in China for […]

Tim Schurr and Shaun Maloney. ARANZ Geo Limited, a recognised world leader in the visualisation and interpretation of geological sciences, has been named as a finalist in the 2014 Champion Canterbury Business Awards in the Global Operator category. ARANZ Geo has built a global reputation in the mining industry in particular as the developers of 3D geological modelling software Leapfrog® which is sold to over 50 countries. Catherine Schache, Commercial Director of ARANZ Geo said, “We’ve been through a period of extremely high growth, as we continue to open up markets around the world. This is a fantastic acknowledgement for the team who have been working hard to develop innovative products with global appeal. We’re committed to Christchurch and we’re really pleased to be contributing to the region’s international reputation.” Schache says the team has had cause to celebrate their achievements this week. Earlier in the week the company announced that Wellington-based Pencarrow Private Equity had taken an equity stake securing a mixture of existing shares and new shares through a significant investment. CEO Shaun Maloney also received a Prime Minister’s Business Scholarship to study at Harvard Business School and London Business School at a function at the Beehive recently. Schache says, “We’re really gearing up to further accelerate global expansion and product plans to build on our past strong growth. We’ll also be looking at strategic acquisition opportunities.” ARANZ Geo’s R&D and head office is based in Christchurch and sales and support offices are located in Australia, Chile, Brazil, Denmark and Canada, with distributors in South Africa, Colombia and Mexico.

New Zealand manufacturing activity fell in July while remaining in expansion for the 22nd straight month as an increase in new orders made up for a dip in production and employment. The BNZ-Business NZ seasonally adjusted performance of manufacturing index fell to 53 from last month from 53.3 in June from a downwardly revised 52.6 in May, although below 54.9 in June last year. A reading above 50 indicates expansion in the sector. The manufacturing sector in New Zealand has proven resilient in the face of a strong New Zealand dollar, which erodes the value of overseas sales. Bank of New Zealand senior economist Doug Steel said. Those headwinds have receded as the kiwi has come off its highs and manufacturers are also likely to benefit from local sales into the construction industry, he said. All five diffusion indexes in the PMI were in expansion in the latest month. New orders rose to 55 from 52.2 in June while production fell 1.9 points to 54, the lowest level since March last year. Employment fell 1.4 points to 51.3. Finished stocks rose back into expansion at 51.5 while deliveries slipped 1.9 points to 53.3. The Northern region recorded the strongest growth last month, rising 6.9 points to 57.5, while central fell to 46.6, the first contraction since January. Canterbury/Westland recorded 52.3 and Otago-Southland fell further into contraction at 45.

The manufacturing sector remains in expansion mode, despite some aspects of the results that need to be watched closely in the months ahead, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).  The seasonally adjusted PMI for June was 53.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 0.7 points higher than May, with the sector now being in expansion for 21 consecutive months. BusinessNZ’s executive director for manufacturing Catherine Beard said that the slight lift in expansion levels was obviously welcome, albeit with a few head winds for manufacturers.  “Overall production levels remain healthy, and have been very consistent for the last three months. Employment levels continue to show more people entering the sector, while the largest proportion of comments received are still positive. “As mentioned last month, the fundamentals of both the PMI and other indicators of the economy still point to positive activity. However, the continued strength of the New Zealand dollar, as well as new order levels continuing to fall, mean there are elements of the sector that need to be watched closely in the months ahead. BNZ senior economist, Craig Ebert says “Wading through the manufacturing component of the latest QSBO, while there are clear hints of moderation, it seems mainly a settling down into normal growth patterns rather than any sort of stalling. We get a similar impression for the recent PMI levels and trends, with its weak spot seemingly concentrated in new orders.”  Four of the five seasonally adjusted main diffusion indices were in expansion during June. Production (55.9) again led the way for the current month with a value 0.8 points higher than May. In contrast, new orders (50.9) continued to fall, dipping another 0.4 points and at […]