Business News

Phil O’Reilly Increased levels of new business/orders is assisting service sector expansion, according to the latest BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for May was 56.8. This was almost identical to the April result (56.7) and the highest result for any month since November 2011. A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining. The 2012 May result was also the second highest value recorded for that month since the survey began in April 2007. BusinessNZ chief executive Phil O’Reilly said that the solid and consistent result for May was pleasing to see, as it was built on key elements of the Index remaining strong. “Like last month, the key indices of new business/orders and activity/sales experienced a swing upwards, with the former at its highest point since November 2011. It is also the first time since 2007 that new orders/business have posted consecutive post-60 values. On top of this, the Northern region has gradually seen an improvement in overall activity levels, which is important in building momentum. “If we also take into account the improved manufacturing result via the PMI, combined, the sectors display a level of activity that is certainly encouraging heading towards the middle of the year.” BNZ senior economist Craig Ebert compared the impressive progress of New Zealand’s PSI to that of the USA, Europe, Australia and China. “New Zealand’s PSI is fast becoming something of a leading light on the global stage. It has overtaken America’s PSI, and unsurprisingly it’s far stronger than the Euro-zone’s, but who would have thought it would be far stronger than Australia’s? It is also fast catching up with the always sturdy, but recently slowed, Chinese PSI. “Add this to the much-recovered PMI and one gets […]

Manufacturing activity bounced back from April’s dip to show strong expansion for the current month, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for May was 55.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This is 7.5 points up from April and is the highest level of activity since February 2012. For the first five months of 2012 the PMI has averaged 53.3, compared with 52.5 for the corresponding time period in 2011. BusinessNZ’s executive director for manufacturing Catherine Beard said the improvement in manufacturing activity was built on some crucial upswings from the previous month. “The key sub-indices of production and new orders showed a significant upswing from April, while the Northern and Canterbury/Westland regions went from decline to expansion in activity. Comments from manufacturers were also more positive, with Australia remaining a sizeable focus for export opportunities. Interestingly, a number of manufacturers could not identify a main positive influence. Instead, it was an overall steady increase in activity from various facets of their business. ‘With four of the last five months in expansion, 2012 is continuing on a better growth path than seen in recent years.” BNZ Economist Doug Steel said, “It is heartening to see a solid PMI result in May. While there are obvious risks from the European situation ahead, recent trends in the PMI suggest the manufacturing sector has made decent positive contributions to overall GDP growth in both Q1 and Q2 of 2012.” The increase in overall activity meant all five seasonally adjusted main diffusion indices also showed expansion in May. This was led by production (58.8), followed by new orders (57.3), which combined make up the greatest weight of the overall result. Employment (52.2) experienced […]

Overly optimistic forecasts are again behind the decision not to cut the Official Cash Rate (OCR) say the New Zealand Manufacturers and Exporters Association (NZMEA). Continued low growth, and broader economic conditions that prevent any realistic expectations of faster export growth, justify a cut. NZMEA Chief Executive John Walley says, “It is clear to anyone involved in the export sector that current performance is poor and prospects for future growth are no better. This is largely the result of the Reserve Bank’s high interest rate policies that drive up the exchange rate reducing export returns.” “The International Monetary Fund (IMF) has stated that a 15 percent drop in the NZ Dollar would be needed to balance our current account in their Country Report on New Zealand – this should be an aim for the Government, Treasury and the Reserve Bank.” “The overcooked forecasts we see underpinning the actions of the Reserve Bank and Government are a result of a lack of absent connections to the real economy by our institutions. Clearly those building these forecasts are out of touch with our trading reality.” “We need a cut in the OCR next time around and a clear statement that more will be done in the macroprudential area to take some speculative pressure of the currency and give exporters a chance. Quite why the Reserve Bank stands by as 95 percent home loans reappear in the market again so soon after a housing bubble is beyond me.”                

One of New Zealand’s best known innovators, Sir Ray Avery, is calling upon kiwi innovators and innovative organisations to get recognised. As ambassador for the New Zealand Innovators Awards, which are now open for entries, he sees recognition as a key component in advancing innovative ideas and technologies. “I encourage you to enter the Awards. I did, and I won, and it changed everything. Get out of the laboratory, or your shed, and encourage others to do the same thing so we can all celebrate how clever we are as Kiwis on the world stage – it’s our time to shine”, says Sir Ray. The New Zealand Innovators Awards celebrate and recognise great kiwi innovations, inventors and organisations that have invested in developing new products, services and ventures as well as improving the performance of their people and teams. Sir Ray was a winner at the awards in 2008, when they were known as the Bayer Innovators Awards. Bayer is once again the main sponsor, in partnership with Idealog Magazine and Ideas Accelerator. “The awards are a great way of celebrating innovation across a broad spectrum of areas, disciplines and industries. We have many innovative organisations here in New Zealand, so as a nation we need to shout about our success loud enough for the rest of the world to hear,” says Louise Webster, owner Ideas Accelerator and awards director. Enter now or to nominate someone for entry into the awards, go to www.innovators.org.nz Award categories for 2012 • Innovation in Design & Engineering • Innovation in Environment & Agriculture • Innovation in Health & Science • Innovation in Hospitality, Food & Beverage • Innovation in Information Communications Technology • Innovation in Manufacturing • Innovation in Marketing & Communications • Innovation in Media, Music & Entertainment • Supreme New Zealand […]

  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 […]