Business News

New Zealand’s manufacturing sector started 2014 on a healthy note, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).  The seasonally adjusted PMI for January was 56.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). The sector has now been in expansion for 16 consecutive months, with the last six months also averaging 56.2. BusinessNZ’s Executive Director for Manufacturing Catherine Beard said that despite the usual seasonal effects of Christmas and the holiday season, the sector has begun the way it finished off 2013.  “Positive comments from manufacturers revolved around a growing confidence by consumers, further gains in building construction and continued high levels of new orders, both domestically and offshore. In particular, the metal product sector is currently benefitting from the strong residential construction boom, which will no doubt continue for some months to come.” BNZ Economist Doug Steel said it would be easy to understand if the PMI had lost a bit of heat in January, given the hefty lift in the NZD/AUD exchange rate. But the PMI has barrelled on, as domestic demand strengthens. Three of the four regions were in expansion during January. In the North Island, the Northern region (53.1) experienced a lower level of expansion after three consecutive post-60 results. The Canterbury/Westland region (53.0) went back into expansion after a no change level during December. The Central region (48.8) remained unchanged in activity levels from the previous month, while the Otago-Southland region (56.4) continued to fall back in expansion from the previous month. Manufacturing by industry sub-groups were mostly in expansion during January. Metal product manufacturing (59.3) rose 10.3 points from December to lead the way for January, while machinery & equipment manufacturing (54.5) dipped slightly in expansion from the previous month. […]

 It is unhelpful to see youth unemployment used to score political points says David Lowe, Employment Services Manager for the Employers & Manufacturers Association.  “The Starting Out Wage youth rates is undoubtedly helping provide jobs,” Mr Lowe said. “Darien Fenton is toying with the issue by quoting some EMA survey data while ignoring other aspects of it. “Our survey found 31 (6%) employers last year hired a young person because of youth rates. “So some young people are getting jobs they would not otherwise get because of it. “But while we are the first to acknowledge the policy is not a panacea it doesn’t make sense to scrap it when young people are getting jobs because of it. “Youth unemployment is a major issue throughout the world; nobody has all the answers and New Zealand needs a multi-faceted approach to address it. “Most of our political parties have some good ideas for addressing the issue but no one has a silver bullet and shouldn’t pretend they do. “EMA has called on our politicians many times to stop the tit for tat on youth unemployment and combine their ideas.”  

As Auckland prepares to welcome the APEC Business Advisory Council (ABAC) meeting this week, a senior Chinese delegation will also attend to explore opportunities for trade and investment with New Zealand.  “We are honoured that China which is hosting APEC this year has invited New Zealand to host the first ABAC meeting for 2014. And we are delighted that as well as the 250 ABAC delegates, a 40-strong Chinese delegation from the APEC China Business Council (ACBC) will also be visiting,” said BusinessNZ CEO Phil O’Reilly. The delegation will follow a parallel programme of meetings in Auckland and Hamilton and will attend some of the ABAC events. “China is now New Zealand’s largest trade partner. This visit gives us the opportunity to continue to build key relationships and the value proposition for expanded business with New Zealand,” said Mr O’Reilly. A key focus for the delegation’s programme is a New Zealand China Forum to be held by the New Zealand China Council. “The Council’s mandate is to expand the relationship across the board,” said Council Chair Sir Don McKinnon. “The Forum will update New Zealand’s latest economic indicators and consider key issues in the relationship especially in relation to food and agriculture as well as investment and innovation.” Senior Chinese business leaders from a range of sectors are participating in the delegation. The visit is also aimed at stimulating New Zealand business interest in the APEC CEO Summit to be held in Beijing 8-10 November. “China’s continuing economic strength is good news but we need to work harder to capitalize on the advantage given by our FTA,” said Phil O’Reilly. “Visits such as this, and the APEC meetings to be held in China this year give us a great opportunity to highlight New Zealand’s capabilities and the win-win benefits from […]

Leading New Zealand businesses are joining with the New Zealand Government to welcome over 250 business leaders from the Asia Pacific region when Auckland hosts a meeting of the APEC Business Advisory Council (ABAC) 11-14 February.  “We intend to give our guests a warm kiwi welcome and use this meeting to advance New Zealand’s critical interests in the region,” said Phil O’Reilly, Chief Executive of BusinessNZ, which is host organisation for the meeting. Major sponsors of the gathering are Fonterra and ANZ. ATEED/Auckland Council, Air New Zealand and the Meat Industry Association are all sponsoring social events and a range of other business organisations are joining in support. “This is an opportunity to showcase New Zealand’s highly innovative and sustainable production systems to an influential audience. Key customers from China and around the Asia Pacific region are attending along with a number of high worth individuals,” said John Wilson, Chairman of Fonterra.  ABAC brings together three members appointed by the Heads of Government of APEC’s 21 member economies. New Zealand’s members are Tony Nowell, Maxine Simmons and Wayne Boyd. ABAC’s task is to provide advice to APEC Economic Leaders on APEC’s trade and investment agenda. China is hosting APEC in 2014 and a delegation of senior Chinese business leaders is also attending the Auckland meeting. “China is assuming the chair of APEC as the region accelerates its economic growth. The ABAC meeting occurs as New Zealand emerges as a star performer on the world economic stage. This gives New Zealand an important opportunity to influence APEC’s direction in a critical year,” said David Green, Managing Director (Institutional), ANZ. ABAC’s agenda takes in trade and investment, sustainable development, financial issues, SME and entrepreneurship, infrastructure and connectivity.  “ABAC’s first meeting for 2014 is the chance to set the agenda for the year […]

Employers are advised to take their own counsel over any pay increases they may afford this year, and not listen to what Finance Minister Bill English thinks, the Employers and Manufacturers Association says.  “Employers need to think very carefully about what they can afford to remain competitive,” said Lisa Goldsmith, EMA’s Remuneration and Benefits Consultant. “Circumstances vary enormously for individual businesses and any increases they can afford will differ. “Pay rates generally fluctuate across industries and different types of positions. “The average increase in our National Wage and Salary Survey in 2012 was 2.1 per cent, and last year it was 1.9 per cent. Overall we expect this modest increase trend to continue. “Many businesses have been consolidating over the past few years but as better economic growth gets underway, businesses should focus on more skills training and sustainable, not rampant, growth. “For many people their job security is worth more than pay increases.”    

New Zealand business owners should not let themselves be seduced or frightened into adopting the latest in information technology advances which, due to the speed of progress, can sometimes do more harm than good.  A good example of scare mongering by some IT experts are warnings that Microsoft will stop supporting Windows XP in 2014 when, in reality, such a move is unlikely to have very much immediate effect. Chief Executive of New Zealand IT consulting and software development company Designertech, Ray Delany, said today there is a misguided perception in business and the IT community that the ‘latest version’ of software, devices and other solutions is something everybody must have.  “It is in the interests of marketers to keep updating and releasing new product because they are in a competitive market and it’s good for profits, but that doesn’t necessarily equate to better functionality or better business. “Even when businesses do not want to change, they can be scared into doing it. However, if a solution is stable, working just fine and meets their needs, there should be little need to change – depending on the particular circumstances, of course.” Delany said Windows XP is a classic example because it’s not like computers will suddenly stop working when Microsoft stop supporting the software. “Your machine and the software will carry on much the same as they always have. In fact, it is a piece of software that is well tested, well used and efficient for its purpose.” He said that very often people will load the latest releases only to find that their computers or devices are not configured to run the software.  “While everything appears to be fine on the surface, you may start to notice little glitches begin to emerge or the hardware stops working completely. That’s […]

 Although this week’s inflation numbers were slightly above expectations, it is still too early for the Reserve Bank of New Zealand to increase the OCR without yet more collateral damage to the manufacturing and exporting sector, say the New Zealand Manufacturers and Exporters Association (NZMEA).  NZMEA Chief Executive John Walley says, “While domestically we are seeing some positives, our value added exporters and import competing manufacturers are still confronting volume and margin challenges.” “Increasing our OCR, in stark contrast to the rest of the world, would be making a choice to further elevate our currency from levels that are already too high. It is better to deal directly with the property problem and the underlying threat to financial stability.” “A rising bias to our OCR would put us out of step with most other economies, world markets remain fragile and most countries are still holding or even relaxing their own monetary policy.” “The recently reported price increases are not widespread throughout the economy and at this point the full effectiveness of the LVR restrictions are not yet clear.” “There is still time and space to wait and see what the world brings and likely hold off any increases in the OCR for much of 2014.” “Our NZMEA Survey of Business Conditions showed total turnover for November increasing by 10.53%, with domestic turnover decreasing 3.95%, and export turnover improving 24.86%.” “This is a change from the trends throughout 2013, which saw domestic activity generally improving, while exports experienced a more downward trend.”    

New Zealand’s manufacturing sector ended 2013 on a healthy note, and the first time since 2007 that every month recorded expansion in activity, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).  The seasonally adjusted PMI for December was 56.4 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). The sector has now been in expansion for 15 consecutive months, with an average PMI value of 56.0 over the year. BusinessNZ’s executive director for manufacturing Catherine Beard said that New Zealand’s manufacturing scene has proven to be one of the standout performers when compared with other countries during 2013. “With every month being in positive territory, the sector did not experience any lulls in activity that has hampered previous years. While the global manufacturing scene is slowly improving, a number of countries are still experiencing a fragile recovery, none more so than Australia where a period of expansion is then followed by a bout of decline. “Given the current pattern of positive economic data hitting headlines on this side of the Tasman, there is every reason to believe that 2014 will be at least the equal of 2013 for the sector.  BNZ economist Doug Steel said, “The firm PMI and robust details suggest that the strong rise in manufacturing GDP in the latest national accounts was no fluke. More manufacturing GDP growth is expected over coming quarters.” Four of the five seasonally adjusted main diffusion indices were in expansion during December. New orders (61.4) again led the way, with five of the last six months recording a post-60 point value. Production (57.2) eased slightly from November, while employment (55.2) produced its highest result since November 2007. Deliveries of raw materials (52.0) fell back slightly but remained in expansion, while […]

Kiwi businesses are predicting big things for the New Zealand economy this year going by their responses to an international survey of entrepreneurs. The Global Entrepreneur Indicator for the six month period to 30 September forecasts increases in profitability, full time employment growth and the opportunity to increase working capital. The indicator is generated from a survey of every chapter of the world-wide Entrepreneurs’ Organisation (EO) and New Zealand businesspeople are among the most positive according to the results. Tony Falkenstein, the communications chair of the NZ Entrepreneurs’ Organisation says local entrepreneurs show a healthy positive attitude compared to other nations. “The most dramatic difference between New Zealand and the rest of the world is our members outlook on the country’s economy,” Falkenstein says. “Seven out of 10 New Zealand members feel our economic environment will improve during the next six months. Only 43 per cent of the rest of the world think the same.” The survey shows virtually in every area New Zealand members have had a positive past six months and believe the good times will continue. “For example, 74 per cent of New Zealand members increased profitability during the survey period, and a similar percentage believe they will do the same during the next six months.” The survey shows NZEO members are finding access to capital easier and about a third will be increasing their debt during the next six months. More than 90 per cent of them are inclined to start a new business in the current year. There’s good news also for New Zealand workers with three quarters of local entrepreneurs saying they plan on increasing full time employees versus 63 per cent globally. “The Global Entrepreneur Indicator reflects the positive attitude of New Zealand entrepreneurs, and this is an excellent sign for New Zealand. […]

Kiwi-Ingenuity should be celebrated as much and even more than the glorious achievements of the All Blacks on the Rugby field.  – By Joel Leonard New Zealand is more than a haven for Hobbits, champion rugby teams, picturesque scenery, and adventurous vacations. Also a haven for Kiwi-Ingenuity! Kiwi Ingenuity has evolved to become the real national treasure for New Zealand. Located over 900 away from Australia, New Zealanders, or Kiwis have had to become very resourceful in order to cope with their remoteness and as a result have been forced to invent their own solutions and have been able to maximise their creativity, otherwise known as Kiwi-Ingenuity. Have you ever heard about Jetboats? From Wikipedia- A jetboat is a boat propelled by a jet of water ejected from the back of the craft. Unlike a powerboat or motorboat that uses a propeller in the water below or behind the boat, a jetboat draws the water from under the boat into a pump inside the boat, then expels it through a nozzle at the stern. Jetboats were originally designed by Sir William Hamilton (who developed a waterjet in 1954) for operation in the fast-flowing and shallow rivers of New Zealand, specifically to overcome the problem of propellers striking rocks in such waters. Previous attempts at waterjet propulsion had very short lifetimes, generally due to the inefficient design of the units and the fact that they offered few advantages over conventional propellers. Unlike these previous waterjet developments, such as Campini’s and the Hanley Hydrojet, Hamilton had a specific need for a propulsion system to operate in very-shallow water, and the waterjet proved to be the ideal solution. From this, the popularity of the jet unit and jetboat increased rapidly. Through further developments, it was found the waterjet offered several other advantages over propellers […]