Business News

The release of regional education achievement information today on the Ministry of Education’s website (www.educationcounts.govt.nz) has been welcomed by BusinessNZ.  BusinessNZ Chief Executive Phil O’Reilly says the information needs to be used to increase the achievement of all students. “Making this information available today is a good first step – but it is important to have continuous improvement strategies in schools and in the wider education system in order to increase students’ achievement. “The information shows considerable differences between the 16 regions, especially with regard to success rates for boys and Maori and Pacific students. “We have to make sure that schools have the flexibility, capacity and capability to innovative and respond effectively to students’ needs. “A recent economic survey of New Zealand by the OECD highlighted the importance of high quality teaching, increased resource flexibility, and on-going professional development of leaders and school boards. “We will be looking for the Ministry of Education and other relevant government agencies to support school boards, leaders, and teachers through incentives and opportunities to innovate more readily in order to make progress. “New Zealand’s challenge is to improve our international competitiveness and standard of living. To meet the challenge, we must ensure all students are well prepared for life after school,” Mr O’Reilly said.  

New Zealand’s service sector remains at a consistent level of positive activity, according to the BNZ – BusinessNZ Performance of Services Index (PSI).  The PSI for June was 55.0. While this was a slightly lower rate of increase than May, the PSI has averaged 55.3 since the start of the year (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). Compared to previous June results, the 2013 value was the highest since the June 2007 value. BusinessNZ chief executive Phil O’Reilly said that like its sister survey the PMI, the PSI is now developing a trend of consistent and positive growth. “The first six months of 2013 represent the best first half of the year since the survey began in 2007. Comments from respondents remain far more positive than negative, and focus on stronger activity, continuing growth and a sense of confidence back in the market.” BNZ Economist Doug Steel said “It is good to see positive growth coming through in the hard data too, in line with what the PSI has been indicating all year.” All five main sub-indices were again in expansion during June. New orders/business (59.7) continued to lead the field, increasing 0.4 points from May. Activity/sales (57.1) also increased from May, while employment (50.1) fell back to the level of all but no change. Stock/inventories (53.8) rose 0.4 points, while supplier deliveries (55.0) fell 1.1 points, although still exhibited healthy expansion. Activity was positive throughout the country in June. In the North Island, the Northern region (54.9) fell back 3.7 points to its lowest level since January. The Central region (50.9) also fell back 2.3 points from May, but remained in slight expansion. In contrast, the Canterbury/Westland region (53.3) went back into expansion after two consecutive […]

BusinessNZ welcomes the announcement of the Establishment Board for the new Crown agency WorkSafe. BusinessNZ Chief Executive Phil O’Reilly says the aim is a world-class health and safety system that includes appropriate regulation, expectations, monitoring and reporting. “This is an important step forward for health and safety in the workplace,” Mr O’Reilly said.  

Results for the month of June confirm a solid and expansionary first half of the year for the manufacturing sector, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).  The PMI is a monthly activity survey of manufacturers operating in export and domestic markets. The PMI is administered by BusinessNZ, representing thousands of exporters and other businesses. The seasonally adjusted PMI for June was 54.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). While this was 4.3 points lower than May, it was still in solid expansionary mode. Compared with previous June results, the 2013 value was the highest since the June 2004 result. Overall, the first half of 2013 has averaged a healthy 55.7, compared with only 49.6 for the previous six months. BusinessNZ’s executive director for manufacturing Catherine Beard said that the June result complements a positive six month trend for the sector.  “While another result like that of May would have been warmly welcomed, the June result still had enough punch to indicate the sector is certainly in better shape than it has been for some time.  “New orders and production continue to hold up, which is a key element for overall growth in the sector. Also, employment has now been in positive territory for 3 of the last 4 months, while comments from exporting manufacturers report continued steady demand for their products.” As BNZ senior economist Craig Ebert points out, “If we were to line up all available PMI and QSBO-manufacturing data against the wall, then their main confession would be of a sector now making clear progress, after a patchy year last year.” Given the on-going healthy levels of activity in the sector all five seasonally adjusted main diffusion indices were again in […]

Contrary to popular perception, the Canterbury earthquakes have not had a pronounced short-term effect on New Zealand’s economy, Victoria University research shows.  “This lack of macroeconomic impact to date is not entirely surprising, given that previous research on large disasters in high-income countries has reached similar conclusions,” say the researchers, Professor Ilan Noy and Ms Lisa Doyle, from Victoria’s School of Economics and Finance. “For instance, the short-term macroeconomic consequences were also minimal after the 1995 Kobe earthquake in Japan and Hurricane Katrina in the United States in 2005.”  The Canterbury earthquakes were found to reduce consumer price inflation only moderately, with the first earthquake having a small, and short-lived, adverse effect on real gross domestic product growth. No significant changes in net migration, private consumption, investment, exports, imports or government consumption were found. Professor Noy says one of the reasons most natural disasters do not have a large short-term impact on the national economy is that production quickly shifts to other regions and, at the same time, regional production actually increases due to disaster-related rescue, and the clean-up, rehabilitation and recovery processes. “In a similar vein, the New Zealand Treasury is predicting that the sequence of Canterbury earthquakes in 2010–2011 will have a positive effect on economic activity once rebuilding gets underway.” Professor Noy emphasises that the research findings do not suggest the earthquakes delivered benefits or were benign economic events. “The increased economic activity is due to the need to replace assets New Zealand had before. This is not very different from the ‘broken windows fallacy’ identified two centuries ago by a French economist, Frédéric Bastiat, who pointed out that breaking a window will lead to increased production and income for the glassmakers and installers who receive their payments, but does not lead to any increase in welfare […]

Callaghan Innovation’s first full three year Statement of Intent has been tabled in Parliament today, setting out how the new organisation will help increase business innovation, and speed up the commercialisation of new products and services. The Statement of Intent sets Callaghan Innovation’s strategic direction and priorities for the next three years. “This Statement of Intent lays out the roadmap for Callaghan Innovation to become the high-tech HQ for New Zealand businesses. It will assist firms across New Zealand to turn their ideas into exportable products and services more quickly, providing jobs and growth for New Zealanders,” Mr Joyce says. “The Statement of Intent lays out a new approach to the challenge of increasing New Zealand’s investment in and returns from innovation, as a major contributor to economic growth.” Callaghan Innovation’s key areas of focus will be to: – Provide research and technical services supporting near-to-market innovation by firms – Award and administer grants to encourage business investment in R&D – Help firms develop skills and expertise to successfully take ideas to market – Help firms access the services and skills they need across New Zealand research organisations – Set up and support National Technology Networks to coordinate innovation initiatives across important technology areas – Foster a culture of innovation and build excitement about business growth potential among current and future business leaders. Callaghan Innovation will work closely with the wider innovation system and NZTE to provide a no-wrong-door approach for businesses seeking support to innovate and improve international competitiveness. “Callaghan Innovation’s work will mean a significant change to the way our innovation system works. It will be a one-stop-shop for business innovation support whether it be in science, engineering, design or technology, providing a stronger and better focussed system for the benefit of New Zealand businesses and our economy,” […]

A leading cloud software company has relocated its offices and increased its staff salaries to 20% above market average in a bid to attract more local IT talent to support its international growth. Unleashed Software which employs 25 staff, relocated its offices to Auckland’s North Shore so local team members incurred less travel time and did not have to endure Auckland traffic issues. The CEO of Unleashed Software, Gareth Berry (pictured), says the global skill shortage in the IT sector calls for technology firms to top up remuneration packages with additional benefits. “It all begins with hiring the best, and then retaining them by giving them everything they need to be successful, including total responsibility and accountability.” he says. Recent staff retention initiatives introduced by his company include; allowing team members to write their own job descriptions, work from home at their discretion and increasing the average company salary to around 20% above the local market. Berry says Unleashed has immediate needs for another 15 expert staff in sales, marketing, design, support solution architecture, BDM and an export specialist to head up their entry into the US market. Berry says that with technology workers’ median salaries having reportedly frozen in the past year, tech companies which offer lower remuneration packages need to develop more enticing work environments now more than ever. He says the key to attracting and retaining IT staff in this market is introducing flexibility, convenience and autonomy into the company culture. Berry says that a visible commitment to employees’ professional development can also help to recruit and retain staff. “IT staff wanting to continue to learn and increase their potential really value the chance to receive on-going educational opportunities. For example, our mobile development team has been born from our existing developers who wanted to learn about […]

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during June 2013, shows total sales in May 2013 increased 1.09% (export sales increased by 23.4% with domestic sales decreasing 12.1%) on May 2012. The NZMEA survey sample this month covered NZ$501m in annualised sales, with an export content of 45%.  Net confidence rose to 33, up from the -9 result reported last month; however the “no change” respondents dominated the return.  The current performance index (a combination of profitability and cash flow) is at 104, up from 101 in April, the change index (capacity utilisation, staff levels, orders and inventories) went up to 105 from 100 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 103, up on April’s result of 99.75. Anything less than 100 indicates a contraction. Constraints reported were 67% markets, 17% production capacity and 17% skilled staff. Staff numbers for May decreased year on year by 1.53%. “Generally this survey reports an overall improvement, other than employment growth and domestic sales. This is a break from the declining trend established over recent months. The large jump in exports was due to concentrated increases rather than a broad based increase. A big improvement in sentiment will be off the back of the fall in the exchange rate. It is too soon for most to see any material fiscal improvement but things sure feel better.” says NZMEA Chief Executive John Walley. “We can only hope the fall continues to a fair value and stays there, however few really believe that will happen, but for now, take what you can while it is going.”  “The experience of recent times is well established, other than the possibility of prudential intervention by the Reserve Bank not much has changed systemically, […]

A Chair in the Economics of Disasters which has been established at Victoria University will provide new knowledge to guide New Zealand in the aftermath of disasters like the Canterbury earthquakes. The Chair, believed to be a world first, will be focused on economic policy and disaster management and is the result of a partnership between Victoria University, the Earthquake Commission (EQC) and the Ministry for Primary Industries (MPI). Professor Ilan Noy from Victoria’s School of Economics and Finance has been appointed to the new role. Professor Noy’s research will investigate economic aspects of the management of natural and other disasters. Although there are centres of research and policy development concentrating on disasters in New Zealand, none have an economic focus.  “The establishment of this Chair is another important step by the Victoria Business School as it increases engagement and partnerships with our stakeholders to improve knowledge and capability in strategically important areas,” says Professor Bob Buckle, Pro Vice-Chancellor and Dean of Commerce at Victoria Business School.  “I am delighted that MPI and EQC have joined with us to support a new Chair that concentrates on understanding the economic consequences of natural and other types of disasters, and on policy options to mitigate their consequences. “Our limits were tested in the aftermath of the Canterbury earthquakes, and we continue to be challenged, for example, by the continuous border risks to the horticultural industry. Understanding the economic consequences of earthquakes, volcanic eruptions, droughts, floods, viruses and bio-security risks helps inform private and public policy decisions around investment in mitigation, preparation and response processes. The aim of this Chair is to help inform decision making on these questions and thereby try to reduce the social and economic costs of disasters.” Originally from Israel, Professor Noy came to Victoria in 2011 from the […]

A University of Waikato lecturer says society needs to take some of the blame for business failures and company disasters, such as the Pike River Mine collapse and BP oil spill. Dr Heather Connolly, who lectures in strategic management at Waikato Management School, has written a book with her father Dr John Bircham titled Addicted to Performance: Society Demands “More-for-Less”. The pair researched a range of accidents and disasters in New Zealand and overseas to find out how the organisations involved were being run before their crisis. They expected to find leadership responsible for organisational success or failure and for common leadership themes to emerge, but what they found was that leadership alone was not to blame for oil spills, cases of fraud, air-craft accidents or company collapse. Dr Connolly says society has to take responsibility too because as consumers we are constantly demanding more from business but want to pay less, and that means businesses are trapped in a cycle of profit and production that has real and serious consequences.