Business News

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.    

New Zealand’s waste policies are stuck in the 19th century as ever-rising levels of rubbish are dumped to landfill instead of systems fit for the 21st century of more and better recycling and possibly waste incineration, a leading environmental law expert says. Waikato’s Professor Al Gillespie told the ICUN Academy of Environmental Law Colloquium held at Waikato University last week that New Zealand is struggling to find sustainable, long-term waste solutions despite years of rhetoric about how clean and green we are. He says we only recycle what is easy and go out of our way to avoid solutions that have proven successful in other countries, such as controlling waste streams such as plastic bags. “If you live in a country like Japan or in some parts of Europe, you have to make different choices and that’s why they have opted for new methods based on the highest technological and corporate standards. These new methods are the way of the future but not what we are doing at the moment,” he said.  

Business is in favour of an integrated, long-term approach to developing major city infrastructure, says BusinessNZ. BusinessNZ Chief Executive Phil O’Reilly says Government proposals announced today for road, rail and tunnel infrastructure for greater Auckland will help address the congestion that is a huge productivity cost to New Zealand, and will bring greater certainty for future business planning.  “As the country’s major business centre, Auckland has significant transport needs that are best addressed in a coordinated way between central and local government and the private sector.  “Business looks forward to participating in discussion on how infrastructure costs can be shared between the Government and Auckland Council and how market-based approaches such as public-private partnerships and tolling may also be used to reduce the burden on taxpayers and ratepayers. “A transparent discussion on cost-sharing and private sector involvement is needed now,” Mr O’Reilly said.        

Recognition from the very top of Auckland’s transport issues is gratifying, the Employers and Manufacturers Association says.  “We welcome the Prime Minister’s candid recognition today of the transport congestion limiting Auckland’s productivity,” said Kim Campbell, EMA’s chief executive. “The government’s efforts to make an early start on the AMETI- East West link in particular are to be applauded. “We look forward to a more detailed dialogue on the ways and means that these projects could be funded and to accelerate their start date.”  

Its great news the government is backing Auckland’s city rail loop, the Employers and Manufacturers Association says.  “We’re very pleased Auckland’s transport issues are being heeded,” said Kim Campbell, EMA’s chief executive. “We’re confident the city rail loop will prove as important to Auckland’s development as the harbour bridge did over 50 years ago. “In fact work should get underway on it sooner than the proposed 2020 start date since the project offers many new and coherent opportunities for the growth and densification of inner city residential and work habitats.  “Auckland’s business community is on record as working consistently with the Council on integrated transport solutions for the city of which the rail loop is but one part.  “We will continue to work on complementary projects including the AMETI – East West road link, public transport, cycle ways and walkways.”  

The new workplace health and safety agency, Worksafe New Zealand, will be most welcome provided it comes with an entirely new organisation approach and culture, says Paul Jarvie, Health and Safety Manager for the Employers and Manufacturers Association. “Businesses are pleased to see the start of the new direction and journey for workplace health and safety just announced,” Mr Jarvie said.  “The Bill now before Parliament creates a new Crown agency dedicated to reducing harm in the workplace, and will take up many of the recommendations announced in the Workplace Task Force report in April this year.  “But injuries and ill-health are preventable, and only with a new way of doing things will we achieve safer workplaces. “Our members do not want business as usual, but rather a new invigorated, focused and modern regulator. “Simply changing the name with the same products, people and services is not acceptable.  “EMA sees this as a chance for business, Government and unions to collectively plan to achieve more productive and healthier workplaces.  “We look forward to working with the new agency and being involved in ensuring New Zealand workplaces become safer.”  

The BusinessNZ Planning Forecast indicates that the New Zealand economy is gaining traction. Export prices remain high, and economic growth is forecast to average just over 3 percent per annum out to March 2015.  Improved business and consumer confidence and continued solid growth prospects for China, New Zealand’s largest export customer, are among the positive indicators in this quarter, says BusinessNZ economist John Pask. However, growth prospects for Australia, New Zealand’s second largest export customer, are muted.  One concern in the domestic economy is increasing household debt levels. “Debt is increasing at a time when servicing costs are relatively low and interest rates are at historic lows. There is a danger that when interest rates rise again, households may get into strife if the economy falters,” Mr Pask said. The BusinessNZ Planning Forecast incorporates BusinessNZ’s Economic Conditions Index (ECI) which tracks 33 indicators, including GDP, export volumes, commodity prices and inflation, debt and confidence figures. The ECI sits at 19 for the June quarter, up 9 on the previous quarter and up 27 on a year ago. The BusinessNZ Planning Forecast for the June 2013 quarter is on www.businessnz.org.nz    

The new regulations announced today to protect migrant workers from exploitation are a positive step, the Employers and Manufacturers Association says. “The changes will help protect both workers and employers,” said David Lowe, EMA’s Employment Services Manager.  “Unethical employers are being given their notice, which is as it should be for both good employers and those being exploited.  “The new regulations send a strong message that the exploitation of people won’t be tolerated in New Zealand. “Employers who exploit migrants are putting at risk the operations of legitimate businesses.”