Business News

When it comes to optimism about the economy, South Islanders are much more bullish than North Islanders with twice the number of Mainlanders being “very” optimistic compared with their northern neighbours. The Grant Thornton International Business Report (IBR) shows that 16.8% of South Islanders are very optimistic about the economy in the next 12 months compared with 8.10% of the North Island. Simon Carey, partner, Grant Thornton New Zealand Ltd, said that the gap narrows when talking about optimism overall with 65.2% of South Islanders being optimistic compared with 61.6% of North Islanders. “These optimism figures are supported throughout the survey with South Island firms expecting to generate more revenue than North Island companies (68.4% to 66.7%), generate better selling prices (46.3% to 38.4%), employ more staff (44.2% to 34.3%), invest in plant and machinery (62.1% to 54.5%) and pay higher wages with 80% looking to increase salaries in line with inflation and above compared with 72.7% for the North Island. At the generous end, 22.1% of South Island firms will increase salaries at levels above inflation compared with 19.2% for the North Island.  “Optimism in the South Island has been trending ahead of the north for some time as evidenced by the research which revealed that 45.3% of South Island firms employed extra staff in 2012 compared with 29.3% for the north. These employment figures were further reinforced by the fact 25.3% of North Island firms decreased their staff in 2012 compared with 16.8% for the south.” Over the last month or so the gap has narrowed with North Island sentiment being lifted by the bubbling Auckland housing market. “South Island levels are tapering mainly because the high end growth that businesses were looking for is now occurring so the expectation levels that drive a business owner’s optimism are […]

The New Zealand Qualifications Authority is currently overseeing a mandatory review of all qualifications at levels 1-6 on the New Zealand Qualifications Framework (NZQF). The Targeted Review of Qualifications aims to reduce the duplication and proliferation of qualifications; to ensure that qualifications meet the overall needs of a particular sector and are useful, relevant and fit for purposes; and meet the new requirements for listing qualifications on the NZQF. Qualifications within the Mechanical Engineering sector are due to be reviewed during 2013. Competenz will be leading this review on behalf of NZQA and is now seeking to appoint a Governance Group to provide strategic direction, guidance and project oversight. HERA is one of the nomination bodies for the Governance Group and are seeking an industry person who is a leader and strategic thinker, willing to put his/her view forward and consult with membership. At this stage in the review this is about the big picture governance and not the specific subject matter which will be consulted on later on in the review process. Please contact the HERA Director with your CV if you feel you are able to contribute and would like to be considered in the nomination process.  

 The final Vocational Pathways launched today by Education Minister Hekia Parata and Tertiary Education, Skills and Employment Minister Steven Joyce is a good start towards making learning more relevant for more New Zealanders, says BusinessNZ. Chief Executive Phil O’Reilly says “Business has been concerned for some time with the performance of programmes provided for secondary school aged students and it’s good to see something concrete being done to connect students’ learning with further education and job options.  “Up until now, it’s been hard for secondary school aged students to find an alternative pathway outside of the university route – a route that many young people do not find appealing or relevant.  “The current arrangements aren’t working for many young people. Students can often end up leaving school with qualifications and credits not particularly relevant to business. Or worse, they leave education without the basic skills like maths and literacy, severely limiting their future opportunities. “This initiative shows that the secondary and tertiary education sector can be responsive to industry and learner needs. It’s a helpful tool, but not a complete solution. More needs to be done towards blurring the lines between education and work, and to better connect education with employment. “It means making better connections between parents, employers and teaching professionals. They all need to be leaders of this process.  “The business community expects all secondary schools and tertiary education organisations to be held accountable for delivering effective programmes. Programmes need to successfully equip our young people to be productive and successful members of our communities, including the skills the business community needs.  “I believe these pathways will make you a better citizen, whatever you end up doing. It’s not necessarily about pre-determination of a career. It’s about students making informed, confident choices, and giving them control over their […]

Global CEOs rate China as the world’s top destination for foreign investment, which is consistent with its significantly expanding economy, according to a global survey by PwC and the China Development Research Foundation. The survey ‘Choosing China: Improving the investment environment for multinationals’ found more than half (56%) of CEOs surveyed chose China above other major and emerging economies including Brazil, Russia, India and the US.  Worldwide CEOs say they were attracted to China’s expanding consumer markets, skilled talent pool and government incentives. “China attracted NZ$133.8 billion (US$111.7 billion) of foreign direct investment in 2012 from multinationals seeking to tap into China’s success,” says PwC New Zealand Partner and China Sector Leader Colum Rice. “China’s economic transformation is absolutely dependent on its ability to continue to attract foreign investment. Yet, it faces new challenges as emerging markets become more competitive. Over recent years, we have seen increasing levels of Chinese investments into New Zealand but what the survey highlights is the emphasis that China is placing on attracting inbound investment. This brings into sharp focus the increasing level of competition which New Zealand faces for foreign direct investment,” adds Mr Rice. The survey found less than 10% of CEOs from smaller companies (operating in less than five countries) have operations in China. “China now needs to promote itself as a place of opportunity for smaller and more specialised businesses to keep the investment renminbis flowing in. All the low hanging fruit is gone and this places Kiwi businesses in a strong position. “New Zealand needs to work hard at selling the benefits we can offer growth hungry China, in terms of the innovation we can bring and financial capital we can help attract. “For Kiwi companies with the IP, brands, relationships and knowledge Chinese businesses crave, a partnership could offer […]

The Commerce Commission has today released an updated timetable for completing its determination of a cost-based price for wholesale broadband ¬¬– the unbundled bitstream access (UBA) service.  Telecommunications Commissioner Dr Stephen Gale announced that the Commission will hold a conference on 12 and 13 June to test the views expressed by industry in submissions and cross-submissions on the draft UBA determination. The Commission expects to finalise the UBA determination in August 2013.  The Commission has fully reconsidered its timetable in light of the ommissionGovernment’s announcements that it intends to defer the date on which the new UBA price will come into effect to sometime in 2015, and that it will initiate a statutory review of the policy framework for telecommunications regulation. The Commission consulted with industry on the implications of the Government announcement, and on whether any changes to the Commission’s timeframes were appropriate. Amendments to the legislation in 2011 introduced a cost-based price for UBA from December 2014. The Commission is required to make ‘reasonable efforts’ to complete the UBA price determination – using international benchmarks – by December 2012, and to allow sufficient time to derive the UBA price from a cost model by December 2014, if requested by industry.  “Despite the proposed deferral of these 2014 deadlines, we have concluded that the grounds for delay are insufficient to outweigh the ‘reasonable efforts’ imperative in the Act,” said Dr Gale. “It is possible that a cost model will be required for the UBA price, and that this task will be combined with the cost modelling that is now underway for the underlying copper local loop. The timeframe for such a combined review would be likely to extend into 2015 and may be more compatible with allowing for changes arising from the review of the Telecommunications Act.”  Unbundled bitstream […]

A major new investment in New Zealand’s titanium materials research is set to enable the development of a pan-industry manufacturing base for high value export products, say participants in the programme. Titanium Technologies New Zealand (TiTeNZ), funded by the Ministry of Business, Innovation and Employment (MBIE), will provide a major boost to research activities with widespread national and international application across the medical, aerospace, defence, marine, energy and general engineering sectors. The research collaboration has initial funding of $3.1M pa for two years, but is aiming to establish a long term programme to support high value manufacturing based on Titanium alloys. Titanium Technologies New Zealand builds on current research capability and infrastructure in titanium metallurgy, high temperature materials processing and fabrication, and advanced surface coatings at Callaghan Innovation, GNS Science, the University of Waikato, the University of Auckland and the Titanium Industry Development Association (TiDA). “This investment will enable the development of a world class titanium research platform in New Zealand and create a multi-company, multi-sector manufacturing base for high value export products,” says Professor Ian Brown of Callaghan Innovation who is leading a cluster of Crown Research Institutes and University applied materials research teams working in partnership with New Zealand industrial manufacturers. Oversight of the new programme will be managed by an Industry Advisory Panel which includes Chairs, former Chairs and Deputy Chairs of NZTE, F&P Appliance, Auckland Airport, Wakefield Health and IRL, as well as managers and owners of award-winning manufacturing and engineering companies. The Advisory Board panel members are Jon Mayson, John Calder, Keith Turner, Barry Robinson, Michael Ludbrook and Andy Cameron. The Chair of the Advisory Panel, Jon Mayson, says: “New Zealand has an amazing opportunity around the research and commercialisation of Titanium materials. We are currently at the leading edge internationally in some of our […]

The composites market is booming with an average of +6% growth per year since 2010. With a growing demand for better environmental impact reduction and costs savings, composites are used more and more often to lighten structures, aircraft, and vehicles in general, thus improving energy efficiency. JEC Group, the largest composites industry organization worldwide, has identified five developments in the market that could grow even bigger by 2030. Indeed, the global composites market represented 81.6 billion Euros (US$108.9 billion) in value for 2012. This market is growing at an average of 6 percent per year. The composites industry is growing in volume in correlation with the increase of gross domestic product by country. And penetration continues in some sectors like Aeronautics. For instance, the Composites market for Aerospace is expected to be 4 times bigger than today by 2030. Also new applications in high volume markets continue to appear for instance in EEE, i.e. Electricity, Electronics & Consumer Goods, especially in Asia. JEC Group has developed a Knowledge & Networking service package including three platforms in Europe, Asia-Pacific, and the Americas to cover the whole composites market. They enable the Group to detect main trends that contribute to the composites market growth. There are five new trends that could change and boost the market, therefore contributing to making it bigger by the next five years. The forecast is 12 Millions of metric Tons by 2017 (compared to 9.2 million metric tons in 2012) Converting processes towards mass production Over the past few years, the composites sector has developed its ability to convert processes, including for large and complex-geometry parts. Large companies have invested heavily in these new technologies, which lower the cost of composite parts (e.g.: thermal curing technology enables mass production in the aerospace and the automotive sectors). Innovation […]

Three prominent companies have committed to establishing bases at Portlink Industrial Park, joining existing tenants such as Kathmandu at the 30 hectare development adjacent to the Lyttelton Tunnel road. The three companies are Christchurch-based NZ Express Transport, Elastomer Products Limited (EPL), and Cla-Val Pacific, a leading manufacturer of automatic control valves. David Mortimer, CEO of Arcus Developments Ltd, which is managing the development of Portlink, said that having three well-known companies confirm contracts within days of each other was ‘quite a coup’. “Each of the companies had its own reasons for choosing the Portlink site,” Mortimer said. “NZ Express Transport first made their interest known to us when we had the land rezoned back in 2009. The location is perfect for them as their core business is container transport. Other lease commitments meant it has been a four-year process for them, but time has only reinforced their confidence in Portlink’s advantages”. Mortimer said that for EPL, which designs and manufactures innovative polymer (plastics and rubber) products, one of the key attractions of the Portlink site was its proximity to the company’s existing earthquake-damaged site and to the majority of its labour force. “EPL was concerned that if they relocated out to the west they could risk losing some of their highly skilled workers, who mostly live in the east of Christchurch,” Mortimer said. “Cla-Val Pacific’s Asia-Pacific operations extend north to Mongolia, west to Pakistan and east to the Philippines,” Mortimer said. “So for them, the decision to situate their Asia-Pacific sales and manufacturing base in Christchurch, specifically Portlink, was due to its ease of access for exporting to clients across the region”. The construction of EPL’s 5,500 m2 warehouse and manufacturing area and 500m2 office is due to commence in the next two or three weeks. NZ Express Transport and […]

The government’s proposal not to ratify Auckland’s Unitary Plan until 2016/17 will load big costs onto Auckland’s ratepayers, and hold back Auckland’s growth, the Employers and Manufacturers Association says. “Business wants Auckland’s Unitary Plan to come into effect (be ratified) this year, not in three years’ time,” said Kim Campbell, EMA’s chief executive. “We understand why Environment Minister Amy Adams wants three years consultation over the myriad of rules and regulations the plan will introduce, but frankly we can’t afford the delay, or the costs of doing this. “The delay will mean uncertainty for business over the next three years, but on top of that the costs to Auckland new home owners and ratepayers will be unnecessarily inflated. “The costs will result from Auckland Council having to manage seven different consent processes under the city’s seven former legacy councils – while introducing the new future looking, single unified process. “This is simply too much to ask. “It will add a significant cost to the building of new homes just when we need them to be cheaper. “The requirement to consult over the Unitary Plan for another three years is included in changes to the Resource Management Act currently before Parliament – it has to be stopped in its tracks. “The issue is the elephant in the room as Mayor Len Brown and Housing Minister Nick Smith discuss today how government and council are to work together on housing. “Business is all for speeding up the development of greenfields and brownfields land so there are more options for affordable housing.”  

The BusinessNZ Planning Forecast indicates a finely balanced New Zealand economy, with positive economic data, but with some risks remaining.  Improved business and consumer confidence, solid growth prospects among New Zealand’s major trading partners, and firm international commodity prices augur well for future growth, says BusinessNZ economist John Pask.  However, risk factors include the ongoing drought which could reduce GDP by as much as $2 billion, and household debt levels that have risen in an environment of low interest rates. Some regulatory issues are also risk factors. “Proposals for new earthquake strengthening standards for buildings are an example of a regulatory approach that could have severe outcomes for the economy. The proposals exhibit poor process with incomplete analysis of the costs of the intended legislation,” Mr Pask said.  “Other aspects of the regulatory environment, such as local government’s slowness in freeing land supply to allow for more affordable housing, and ongoing exorbitant development contribution charges also cause concern.”  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 18 for the March quarter, up 3 on the previous quarter and up 16 on a year ago. The BusinessNZ Planning Forecast for the December 2012 quarter is on www.businessnz.org.nz