Business News

  New Zealand businesses are shrugging off the current volatility in the Kiwi dollar and are predicting a gradual lift in the currency through to March 2013 according to a new survey released today by ASB Institutional. The inaugural ASB Institutional Kiwi Dollar Barometer reveals that although businesses see some potential for further easing in the NZD/USD over the next few months, the expectation among survey respondents for the NZD/USD at the end of December 2012 is 77.1 cents, with a recovery to 80 cents expected by March 2013. The average expectation for the NZD/USD is higher amongst importers relative to exporters. Importers, on average, expect the NZD/USD to recover to 77.2 cents by the end of this year, and reach 80.3 cents by March 2013. In contrast, the average expectation amongst exporters is for the NZD/USD to ease further to 74.8 cents by the end of this year. While exporters also expect a recovery in the NZD/USD by March 2013, the average expectation of 78.4 cents is slightly lower. “ASB Economics also forecasts some recovery in the NZD, but to a slightly higher level of 83 cents in March 2013. The extent to which the NZD lifts will depend on how successful Europe is in containing the ongoing debt crisis, which has pulled the NZD down recently”, said ASB Chief Economist Nick Tuffley. The Barometer also revealed that more than three quarters of respondents planned to hedge their foreign exchange exposures over the next three months. According to Mr Tuffley, this suggests New Zealand businesses are reasonably engaged with managing their foreign exchange risk. “This is likely to reflect the increasing trade and financial links between New Zealand and the rest of the world, as well as higher volatility in foreign exchange markets in recent years.” According to the […]

Official and unofficial data show the New Zealand economy is growing slowly. While even slow growth is a positive given current global economic settings, New Zealand does face some risks in meeting economic forecasts outlined in the recent Budget, according to the BusinessNZ Planning Forecast for the June quarter 2012. Declining international commodity prices and declining confidence in the rural sector, poor consumer confidence and low investment levels by business are among the risk factors for the New Zealand economy. But there are also positives. A focus on debt reduction by businesses and households is good in the light of New Zealand’s vulnerability to changes in international investor sentiment; interest rates remain at historic lows, assisting with debt reduction; and inflationary pressures remain firmly in check. 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 6 for the June quarter, up 2 from the previous quarter and down 7 on a year ago. The BusinessNZ Planning Forecast for the June 2012 quarter is at www.businessnz.org.nz      

The role of New Zealand employers at the International Labour Organisation has been completely misrepresented by the CTU, says BusinessNZ. Chief Executive Phil O’Reilly says the role of BusinessNZ at the ILO is to contribute to a consensus position by employer representatives of more than 150 countries. The CTU’s role is similar for employee representatives from those countries represented at the ILO. A large debate has occurred about a report of a technical committee concerning the legitimacy of strike action in support of political or social issues that may have nothing to do with the workplace concerned. Employers around the world have always believed that decisions around the legality of strike action should be made at the national, not international level. The technical committee report suggested that such rights should be established internationally and that they should allow strike action to take place in support of political and social matters. BusinessNZ Chief Executive Phil O’Reilly said it was unlikely that New Zealanders would agree that strike action should be provided for in law over issues that had nothing to do with the workplace, for example political disagreements in Myanmar or North Korea. “Widening the scope of potential industrial action in this way could mean local businesses destroyed and jobs lost over debates that have nothing to do with the employers and employees concerned.” As a result of the debate the ILO conference was unable to hear the scheduled debate about alleged abuse of employer and employee organisations in countries such as Fiji and Venezuela. However, consensus has been now reached, which involved a re-examination of the reporting of abuse against employer and employee organisations along with the acknowledgement of employer concerns about the workings of the technical committee. Mr O’Reilly expressed surprise at the CTU’s statement given it was made […]

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during May 2012, shows total sales in April 2012 decreased 1.51% (export sales increased by 5.41% with domestic sales decreasing 6.09%) on April 2011. The NZMEA survey sample this month covered NZ$428m in annualised sales, with an export content of 43%. Net confidence rose to 9, up from the -20 result reported last month. The current performance index (a combination of profitability and cash flow) is at 101, up from 99 in March, the change index (capacity utilisation, staff levels, orders and inventories) remained steady at 101, and the forecast index (investment, sales, profitability and staff) is also steady at 102. Anything less than 100 indicates a contraction. Constraints reported were 91% markets and 9% production capacity. Staff numbers for April decreased year on year by 3.38%. “There is a continuation of the flat line we have seen in manufacturing for the past few years,” says NZMEA Chief Executive John Walley. “Generally the story of sales just holding up, but weak order books and a lack of confidence in future prospects remains prominent.” “The big concern of the past six months or so has been staff numbers. Since September last year we have seen a contraction in staff numbers which suggests manufacturers are reducing capacity underscoring the soft expectations – not a good long-term prospect.” “Comments on overseas markets were that the United States is looking stronger than Europe and that exports to Australia are suffering as firms exporting from Australia struggle with their high exchange rate.” “Exchange rate difficulties once again led the list of threats to manufacturers.” “Some insurance claims are getting settled in Christchurch which is encouraging, but there are still some hold ups particularly with the building elements of insurance claims.” “The […]

Iconic Australian entrepreneur and adventurer Dick Smith will be the keynote speaker at a one off seminar taking place in Queenstown on Friday September 14. The seminar, ‘An Afternoon with Dick Smith’ is intended to provide a forum for the discussion of some of the challenges facing business and society over the coming years and will give audiences the chance to gain greater insight into the mind of a man renowned as one of Australasia’s most progressive thinkers. Event organiser Andrew Martin of Oneness Publishing said he was expecting there to be a lot of interest due to Smith’s high profile as a businessman and his history of daring exploits with tickets expected to sell quickly. “This is a rare opportunity to hear one of this era’s business leaders and visionaries talk about the world as it is, where it should be going and how we should go about taking it there,” Mr Martin said. ” Dick wants to talk about the real issues our businesses and societies face and what he has to say is thought provoking and possibly even controversial for some.” The founder of Dick Smith Electronics, Australian Geographic Magazine and Dick Smith Foods,Smith is well known for his outspoken views on ‘extreme capitalism’, limits to growth and foreign ownership of agricultural resources. He is a staunch advocate for supporting local industries as opposed to selling ‘off the farm’ and importing cheap foreign goods that destroy local industry and economies. As well as being a successful businessman and iconic character Dick Smith is an avid adventurer achieving many aviation firsts such as flying solo in a helicopter around the world as well as the first to successfully complete an east-west crossing of the Tasman Sea by balloon, from New Zealand to Australia against prevailing winds. Other notable […]

Gallagher Group’s decision to deliver a single global identity has resulted in a company name change for prominent local business, PEC Fuel Pumps. One of New Zealand’s most successful privately owned companies, Gallagher is a global leader in the innovation and marketing of technology solutions for Animal Management, Security and Fuel systems. But increasing opportunities in the global security market with major technology developments are driving the repositioning of its future business strategy and brand identity. Now, the Hamilton based company with over 1000 staff worldwide has aligned all business units and market products under one name, Gallagher, including PEC Fuels Pumps who will be known as Gallagher Fuel Systems. Managing Director, Richard Coxon, says for market consistency Gallagher had to move away from the many brands in its stable. “We were divisionally structured with Security Management Systems, Animal Management and PEC Fuel Pumps and each division marketed various product brands. “It encouraged individuality between divisions and sub-cultures within our organisation. Most importantly our customers were confused about who we are and what we stand for.” While the company formerly known as PEC Fuel Pumps is officially registered as Gallagher Fuel Systems it will market itself as Gallagher in line with other business units of the privately owned business. “Gallagher is positioning itself as a global technology brand offering solutions in animal management, integrated access and perimeter security and fuel systems. We’re also expanding our capabilities within manufacturing including electronics, plastics processing and tool and die making which is where we see opportunities for the local facility.” He says introducing a single brand enables each business unit to enhance the other’s message instead of diluting it. “This meets a key business objective to develop a unified global technology company which can offer a range of competencies to the industries it […]

  It’s not easy for New Zealand manufacturers to compete against the lower costs of international firms. But where we can’t compete financially, we can compete by building a highly productive workforce with a strong knowledge of lean principles. And building a productive workforce was what Tru-Test Group, the world’s leading manufacturer of livestock scales and milk metering equipment, set out to do. In 2007, Tru-Test embarked on their lean journey through a continuous improvement programme known as TRACC. Then in 2010, Competenz, the Manufacturing Industry Training Organisation (ITO), joined the party. “We realised that what Competenz could bring was a nationally recognised qualification that aligned with TRACC and reflected the effort of every employee,” says Jeff Tuffnell, Tru-Test training provider. So to recognise this effort, Tru-Test held a graduation ceremony to celebrate the success of over 100 employees who achieved the National Certificate in Competitive Manufacturing, Level 2. “Some workers have never had a formal education – yet they practise lean manufacturing every single day,” says Fred Hanson, Tru-Test Manufacturing Manager. “They deserve to be recognised with a qualification.” When Tru-Test first started training, it was quickly discovered that a challenge employees were facing wasn’t the how, but the what. “They weren’t familiar with the terminology even though they know exactly what it entails,” says Nick Fitzgerald, Polymers Accessories Team Leader. “So we took them through the factory floor and showed them how each term was actually part of their daily job – now they have a qualification to be proud of.” But investing in their people has not just meant a rise in staff morale, but the teams increased skills have filtered down to mean increased productivity – helping Tru-Test in their goal to become New Zealand’s leading manufacturer. “An improved team culture has seen our workers actively […]

Total debt, not government debt, is the major issue for New Zealand say the New Zealand Manufacturers and Exporters Association (NZMEA). The Budget released yesterday detailed how the Government hope to move out of deficit by 2014/15 but it is the current account deficit that is forecast to expand and that has the potential to cause a debt crisis here. NZMEA Chief Executive John Walley says, “The current account balance demonstrates that NZ Inc has been in deficit for a long time. This essentially means that New Zealand as a whole has been either taking on more debt or banking a lower return as assets are sold offshore for the past couple of decades.” “The distinction between Crown and private debt is essentially academic with governments around the world bailing out lending institutions, so the management of our current account must be the focus.” “The 2012 Budget projected the current account to get significantly worse out to end of the forecast period.” “On the revenue line a broader tax base including capital gains and active exchange rate management are the keys to promoting productive investment over asset speculation thereby improving export growth.” “On the spending lines the entirely predictable burgeoning superannuation costs have to be addressed, it is a pity that Government don’t listen to Peter Dunne on this issue.” “On the savings side the sooner Kiwisaver becomes compulsory the sooner we will no longer bemoan the absence of savings in New Zealand.” “Until we develop the mettle to deal with the big issues our economy will continue to falter as we mess around the edges. Private debt, not Crown debt, is the issue facing New Zealand.”  

The Budget has brought more helpful tweaking but still not the step change needed to turn around the economy say the New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive John Walley says, “The more fundamental problems, such as a lack of export growth, have once again gone ignored. Generally the right sentiments are there but the action is simply too timid.” “The growth forecasts have been scaled back since last Budget but there is still some downside in the Treasury’s numbers. The Treasury’s numbers have been generally optimistic over the past few years so if growth doesn’t live up to forecasts, any surplus forecast will evaporate.” “Initiatives such as research and development spending, youth training and cracking down on tax avoidance are commendable (although research and development spending is far better directed through a tax credit rather than through a layer of bureaucrats), but are not enough on their own. The Government must also address the big picture issues such as the capital gains or land tax issue to have a really broadly based tax take.” “Overseas merchandise trade statistics released today showed exports down 17 percent on April last year – clearly what we have is not working, and we need far stronger elaborate exports to support the performance in primary sector. The increasing current account deficit projections should be keeping us all awake at night.” “In short, we really need is a mechanism to manage our exchange rate, an even more balanced tax system and incentives for productive investment,” says Mr Walley. “Unfortunately we are not really that much closer to getting those fundamentals right.”  

Today’s zero Budget will give business heart to invest and expand the economy, the Employers and Manufacturers Association says. “By reining in its spending thereby keeping in check its rising debt, the Government will give business the head room to grow the economy,” said Bruce Goldsworthy, EMA’s Acting Chief Executive. “There’s no way we can keep on borrowing the way we have been; Europe’s troubles point to what would happen if we kept down that track,” Mr Goldsworthy said. “The lesson from Europe is that Government spending need not, should not, and ultimately cannot dictate the pace of New Zealand’s economic growth. “Only business can do that. “The government’s role is to set policies that give business people the confidence to invest and employ people, which grows the economy – today’s Budget takes a sober approach to doing just that. “Particular Budget initiatives welcome by business include the setting up of the Future Investment Fund as a reservoir for the revenues from the sell down of state assets and charged with investing them in buying more government assets, especially for education and health. “The $385 million more to be invested in research, science and innovation is an important signal – the Advanced Technology Institute can’t come soon enough. “The commitment to maintaining investment in infrastructure is equally welcome. “In all, the Budget is a calculated response to today’s most difficult financial conditions that most thinking people will understand and accept.”