Business News

Continued high levels of new orders ensured the manufacturing sector remained in expansion, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).  The seasonally adjusted PMI for September was 54.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). Although this was the second consecutive month the level of expansion has declined, compared with previous September results the 2013 value was the highest since 2007. Overall, the PMI has averaged 56.1 since the start of 2013.  BusinessNZ’s executive director for manufacturing Catherine Beard said that while another dip in the level of expansion was not ideal, the sector remains in a solid position. “Manufacturing activity has now been in expansion for 10 consecutive months, with 2013 remaining on track to be one of the best years for the sector in some time. Also, despite the lower level of expansion, the proportion of positive comments from manufacturers increased slightly from August, with residential building activity throughout the country being one of the drivers.” BNZ senior economist Craig Ebert said “While manufacturing growth has slowed from the eye-popping 59.4 in July, it is still in better than average expansion. Remember the line in the sand between expansion and contraction is 50.0, so the disappointment is simply that growth is decent rather than very strong. “A timely check to allay any anxiety is to compare it against the manufacturing component of Tuesday’s NZIER Quarterly Survey of Business Opinion (QSBO). Taken together, the PMI and QSBO signals remain relatively positive.” Three of the five seasonally adjusted main diffusion indices were again in expansion for September. New orders (58.8) again led the way for September, following consecutive post-60 results. Production (55.5) experienced another slight dip in expansion levels during September, while deliveries of raw […]

The New Zealand Agribusiness Centre, New Zealand Trade and Enterprise (NZTE), the Ministry for Primary Industries, and the Ministry of Foreign Affairs and Trade this week welcome the largest Colombian delegation to ever visit New Zealand. Some 170 Colombian farmers are spending a week in New Zealand to get first-hand insights into New Zealand’s pastoral farming systems and agritechnology. The visit includes an exhibition and seminar with major players in New Zealand’s agriculture sector at Mystery Creek Event Centre (home of Fieldays); fieldtrips to dairy, beef and sheep farms; and a visit to Landcorp’s pastoral farm development blocks near Taupo. Led by Fedegan, the Colombian Federation of Ranchers, the delegation to New Zealand follows Prime Minister John Key’s official visit to Mexico, Colombia, Chile, and Brazil earlier this year as part of the Government’s increased focus on strengthening bilateral relations and capitalising on trade opportunities with Latin America nations. It also follows on from New Zealand’s recent participation in AgroExpo, Colombia’s largest agriculture tradeshow. “Colombia is an emerging market for New Zealand agribusiness, and we are delighted to host Dr Carlos Severini, the Chairman of the Fedegan board, and this full delegation of Colombian farmers,” says Fieldays General Manager Commercial, Nick Dromgol. NZTE’s Global Agribusiness Programme Leader Haylon Smith says that Colombia has a fragmented but rapidly developing farming industry; a lot of their farms are remote without access to good transport, and there is a lack of what most New Zealand farmers have come to consider as basic farming management systems and practices. “This presents a significant opportunity for New Zealand agribusinesses who are leaders in pastoral farming and agritechnology, and have a reputation for producing internationally-significant research, agriculture practices and products,” Mr Smith says. “Many Colombian farms are run in a more traditional way compared to New Zealand, […]

The Youth Guarantee and other skills training schemes are clearly getting traction so it’s great they’re being expanded and added to, says Kim Campbell, chief executive of the Employers and Manufacturers Association, commenting on the training package announced today.  “We’re much encouraged by the government focus on getting younger people either into skills training or work,” Mr Campbell said.  “The expansion of these programmes broadens the suite of initiatives to help do this. “Their success is registered in the fall in the youth unemployment rate – amongst 15 to 19 year olds it was 27.6 per cent two years ago at the end of the June quarter down to 24.1 percent this year. “That’s still far too high. Over 30,000 unemployed young people represent a massive waste, and a future liability. “Expanding these schemes is the right response, and this will also help ensure the success of them by encouraging employers to take on younger workers at every opportunity.  “It’s difficult to imagine a better way to deploy the taxpayer’s resources.”    

The BusinessNZ Planning Forecast shows nearly all key indicators for the economy are positive.  The manufacturing and services sectors continue to show solid growth, international commodity prices remain firm, and business and consumer confidence are high. The construction sector is growing strongly, led by the Christchurch reconstruction and the flow-on effects of building seismic strengthening. BusinessNZ economist John Pask says data coming out of the major world economies show recent improvement, which is good news for New Zealand exporters.  “But high household debt is a continuing issue. When interest rates rise again, the cost of servicing high debt levels will adversely affect households. It will also likely impact on the NZ dollar to the detriment of exporters,” 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 17 for the September quarter, up 3 on the previous quarter and up 14 on a year ago.  The BusinessNZ Planning Forecast for the Sept 2013 quarter is on www.businessnz.org.nz        

The employment law changes currently before Parliament are part of the catch up process needed to reflect common practices already in place in today’s workplaces, David Lowe, Employment Services Manager for the Employers and Manufacturers Association told Parliament’s Transport Industrial Relations Select Committee. “The present law limiting a worker’s right to discuss flexible working arrangements to those with dependents is out of date,” Mr Lowe said. “It’s sensible that anyone can ask for flexible work hours for any reason, as proposed by one of the amendments. “Another seeks to change the current law which sets out precisely when coffee breaks can be taken. This is unworkable and openly flouted by employees and employers alike. “The law should simply require that reasonable breaks are provided then let those involved work out the details how it should apply to them. This is what happens now – the amendment is just catching up with the modern workplace. “Industrial action, the ultimate weapon, can cause long-term issues both within the workplace and for customers. The changes proposed are welcome as they will encourage strikes to be well considered and as orderly as possible,” Mr Lowe said.  

BusinessNZ has welcomed the prospect of lower ACC levies.  ACC consultation documents show employer, employee and motor vehicle levies are set for reductions of 15 – 17 percent next year.  BusinessNZ Chief Executive Phil O’Reilly says better management of the ACC scheme, based on sound insurance principles, is starting to deliver lower premiums. Experience rating, where employer levies can be reduced in response to a safe work history, is helping to keep the premiums down. The work and earners accounts are now fully funded and the position of the motor vehicle account is starting to improve.  A proposal to introduce risk rating for cars based on crash results is also a positive move, as safety features in newer cars can significantly reduce the number and severity of road injuries.  But the continued significant cross-subsidisation in the motor vehicle account is still a concern, Mr O’Reilly says. “Car owners are still significantly subsidising motorcycle owners. “Overall transparency could be improved, with an independent body preferable to the current political levy-setting process. “ACC has the potential to be still better governed and managed, to further reduce accident numbers and improve rehabilitation outcomes.”      

Manufacturing activity continues to push forward with another healthy month of expansion for August, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).  The seasonally adjusted PMI for August was 57.5 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). While this was 2.0 points lower than July, compared with previous August results the 2013 value was the highest since the survey began in 2002. Also, over the last four months of 2013 the PMI has averaged a strong 57.8. BusinessNZ’s executive director for manufacturing Catherine Beard said that comments from manufacturers show a healthy and stable environment for growth at present.  “Those providing positive comments continue to focus on opportunities relating to orders and sales. At a domestic level, many of those involved in the building and construction sectors are seeing strong demand for their products, but equally various offshore customers are providing a steady stream of orders for New Zealand goods.  BNZ Economist Doug Steel said the PMI results were important, suggesting the trend in manufacturing activity remains positive following a tough second quarter, as a decline in food processing on account of drought coincided with what looks like a pause in an otherwise strong construction upswing. The PMI average in July-August 2013 is the highest 2-month average PMI reading in over 9 years. It bodes well for a bounce in manufacturing, following the disappointing Q2 results. Given the ongoing healthy levels of activity in the sector, all five seasonally adjusted main diffusion indices were again in expansion for August, which has now occurred for the last four months. New orders (60.9) led the way for August with another post-60 result. Production (58.3) experienced a slight dip in expansion levels during August, while deliveries of raw materials […]

Chief Executive, Business NZ, Phil O’Reilly, says the proposed reforms are sensible and address a key problem: the RMA is doing a poor job of delivering good decisions that appropriately consider both environmental and development factors. “We need a better decision-making framework so the environment can be protected and development can also occur. “The RMA currently gives precedence to the environment (section 6), while development (section 7) is subservient to it. “The proposed reforms would merge the principles in sections 6 and 7 so that decision makers would be required to ensure environmental and development issues were both taken into account. “The criticism has been made that merging those sections wouldn’t work, since environment and development are in conflict with each other. “This criticism is unfounded. The RMA was always meant to be able to weigh up all of the important values to reach decisions that delivered sustainable management of the environment. But we can hardly call the operation of the RMA to date a success. Let’s take this opportunity to lift our vision of sustainable management up from the minutiae to what is strategically important. “Reforming the RMA so it can actually do that job is well overdue, and it’s good it is finally being addressed. “Let’s not use changing case law as an excuse for inaction as this is a product of any legislative change. “We should improve the RMA’s principles and trust decision makers to get the balance right when considering development proposals, while appreciating that there are sound appeal processes if a good balance isn’t achieved. “Merging sections 6 and 7, along with other proposed changes to the Act, would go a long way towards improving environmental outcomes while facilitating investment and jobs,” Mr O’Reilly said.  

 The employment law changes currently before Parliament are part of the catch up process needed to reflect common practices already in place in today’s workplaces, David Lowe, Employment Services Manager for the Employers and Manufacturers Association told Parliament’s Transport Industrial Relations Select Committee today.  “The present law limiting a worker’s right to discuss flexible working arrangements to those with dependents is out of date,” Mr Lowe said. “It’s sensible that anyone can ask for flexible work hours for any reason, as proposed by one of the amendments. “Another seeks to change the current law which sets out precisely when coffee breaks can be taken. This is unworkable and openly flouted by employees and employers alike. “The law should simply require that reasonable breaks are provided then let those involved work out the details how it should apply to them. This is what happens now – the amendment is just catching up with the modern workplace.  “Industrial action, the ultimate weapon, can cause long-term issues both within the workplace and for customers. The changes proposed are welcome as they will encourage strikes to be well considered and as orderly as possible.  “Employers acknowledge and accept union bargaining is central to our employment law. But a change is needed for when, despite everyone’s best efforts, that bargaining becomes destructive. “The change proposed allows those involved to ask the court to let them take a break, cool off, then start again. We think this is a reasonable response to any situation that for any reason becomes emotionally super-charged.  “However it is absolute nonsense to suggest any of these changes will decrease wages,” Mr Lowe said.  

The Youth Guarantee and other skills training schemes are clearly getting traction so it’s great they’re being expanded and added to, says Kim Campbell, chief executive of the Employers and Manufacturers Association, commenting on the training package announced today.  “We’re much encouraged by the government focus on getting younger people either into skills training or work,” Mr Campbell said. “The expansion of these programmes broadens the suite of initiatives to help do this.  “Their success is registered in the fall in the youth unemployment rate – amongst 15 to 19 year olds it was 27.6 per cent two years ago at the end of the June quarter down to 24.1 percent this year. “That’s still far too high. Over 30,000 unemployed young people represent a massive waste, and a future liability. “Expanding these schemes is the right response, and this will also help ensure the success of them by encouraging employers to take on younger workers at every opportunity.  “It’s difficult to imagine a better way to deploy the taxpayer’s resources.”