Business News

Productivity and Wages

By Dieter Adam, Chief Executive NZMEA At the first Leaders’ debate of the 2017 general election, productivity received some discussion, with the Prime Minister dismissing claims that productivity in New Zealand was low by comparison and not showing any signs of improvement. Following this, there was a number of quality pieces of work on the issue, specifically by Newsroom’s Bernard Hickey and ex RBNZ economist, Michael Riddell – you can see a summary of these articles on the NZMEA website. Today I want to discuss some of the data they bought up and particularly focus on the core link between wages and productivity. The debate referred to a recent JB Were report showing trends for GDP per person and GDP per hour worked, with the former growing at around 1% and the latter actually falling currently. The Prime Minister stated that, “JB Were are just wrong. They are way over-stating the case.” As other evidence of the problem, there was a recent OECD report, which we have discuss previously. This showed New Zealand’s flat to slightly negative labour productivity trend over the last 20 years, and at significantly lower levels than the United States and Australia. Michael Reddell posted a related graph on his blog, showing that in terms of real GDP per hour worked, from 2008 to around the end of 2012, we saw similar low but positive results as Australia. However, since around the start of 2013, New Zealand’s real GDP per hour worked has been flat, while Australia’s has continued to increase. The other problem we face with low productivity growth is how much – or how little – room there is for wages to grow. As our manufacturing members well know, the core driver for what a business can afford to pay its staff is their […]

Vote productivity

It’s all about to happen on Saturday. The government for the next three years will go forth with a whole new set of plans and ideas on how to make our lives better. We know there are serious social issues which are worrying, decidedly so, and there are business issues which affect the social issues…so let’s concentrate here on what the issues and this publication are all about. Better business and business opportunities for all manufacturers and businesses through increased productivity. The leaders have spoken a bit about improving productivity and it needs a determined focus to bring it up to speed. NZMEA, for example, is a focussed and committed organisation looking out for the better, they address this subject often…and now it is the new government’s turn. It’s a bit like the Minister for Manufacturing issue, it gets raised and put into the too hard basket; if this had been dealt with years ago we may not have a productivity problem as we have now. Initiatives for workers would be further ahead, streamlining of areas of study would see companies getting the staff they require earlier on. Productivity in the horticulture, agriculture and wine industries is ahead of ‘hard core’ manufacturing because the end – the order from the client overseas and locally is determined a long way ahead. Also having quality products in high demand helps. Increasing productivity comes at a cost as well, of course, as a benefit. Good workers upping their game and reaching targets for their employers deserve a decent wage. This becomes for many a real living wage. Increasing productivity means that as a country we keep on looking for the opportunities – with internal developments and infrastructure and overseas. But mostly productivity needs to be lived, to be way a thinking, a frame […]

Time to pull our collective heads out of the sand

Yesterday’s release of Treasury’s Pre-Election Economic and Fiscal Update (PREFU) provides a fairly sobering forecast of our ability to grow wealth in and for New Zealand, say the New Zealand Manufacturers and Exporters Association. NZMEA Chief Executive, Dieter Adam says, “We have to face the reality of our lack of economic development in New Zealand. And now is the right time to challenge New Zealand’s leading parties to tell us what they are going to do to push our economy towards a more prosperous future for everyone.” “For the next four years (2018 to 2021) Treasury forecasts a decline in the rate of absolute GDP growth in 2020 and 2021, with a similar decline in the export growth rate, down to just over 2% in 2020 and 2021. By then we’ll be four years away from the current Government’s goal of growing the share of exports to GDP to 40%, and further away from reaching that goal than ever. “These observations sit alongside our own, and Statistics New Zealand’s data on exports of elaborately transformed goods, which have been in decline for the past 18 months or so. “Treasury’s forecasts for the increase in GDP, as modest as they may be, are still based largely on a growth of labour inputs due to immigration for 2018. After that, miraculously, labour productivity will take over as the main driver of GDP growth. When it comes to explaining what this expectation is based on, given that for the last three years, for example, we saw virtually no productivity growth in our economy, the report remains silent, but states that “productivity growth may be slower than assumed if labour inputs grow more strongly than expected” – meaning if the forecast drop in immigration numbers doesn’t eventuate. “So, what have we actually got here? […]

Got A Trade? Got It Made!: Industry Training Award Winners

The 2017 Got A Trade? Got It Made! Industry Training Awards, held at Parliament last night, showcased inspiring young people driven to make a big difference in their industry. Fifty of New Zealand’s best and brightest young trainees and apprentices gathered in Wellington to rub shoulders and receive honours at this year’s awards. “These incredibly impressive young people are some of New Zealand’s future business leaders, and we are in good stead,” says Industry Training Federation Chief Executive Josh Williams. “Got a Trade! promotes the massive range of job opportunities that offer the chance to ‘earn and learn’ and launch successful careers. We congratulate last night’s winners for the significant mark they make in their work and study, and we celebrate 148,000 apprentices and industry trainees gaining critical skills and qualifications in over 140 trades and services.” Graphic and Web Designer, Myra Anderson, received the evening’s top honour, Industry Trainee of the Year. Described as driven, focused and positive, Myra has completed a Diploma in Interactive Design, Level 3 and 4 Certificates in Digital Print Processes, and intends to start her Print Management Diploma next year. Myra says her Competenz print apprenticeship gave her the confidence, skills and knowledge to turn a job into a career. She has worked on national campaigns and taught herself both industry and business management skills at Wellington’s printing.com. Her goal is to become an art or creative director – all through on the job learning. Air New Zealand Customer Service Agent, Jahmaine Cummings-Hodge, received the Maori Community Impact Award. Jahmaine enriches and integrates community and cultural elements at work, promoting Te Reo and Maori tourism for local, national and international audiences. Jahmaine has taken Kapa Haka teams to national and international competitions and performing arts festivals. He is a proud recipient of Air NZ’s […]

BusinessNZ’s Election Manifesto

Based on a survey of employers throughout New Zealand, the Manifesto outlines seven priorities that business would like to see enacted after the 2017 General Election. BusinessNZ Chief Executive Kirk Hope said businesses want a Government that will reduce taxes, fix problem legislation, and boost growth in the regions. “Business wants to see a tax cut for all categories of taxpayer early in the first term of the new Government, and no new taxes of any kind.” Mr Hope said employers in many sectors were worried about being unable to fill job vacancies, and wanted action on skills. “They are unhappy with the level of skills coming out of the education system and want those skill gaps fixed by education and, if necessary, immigration. They want employees with better technical skills to help to grow more innovative and sustainable businesses.” Local government and the Resource Management Act were also a key concern “There’s a strong view that the RMA is holding the country back – 95 percent of businesses surveyed want it fixed or gone.” Businesses were also concerned about local government investing rates money in council-controlled enterprises and non-essential spending, while failing to invest in infrastructure. 65 percent wanted local government to stick to core functions like providing infrastructure. Kirk Hope said business wanted a Government that continued negotiating free trade agreements to reduce the tariff burden on New Zealand exporters. A large majority want trade agreements with the US, UK, EU and the new TPP-11. “These seven priorities if enacted by a new Government would improve the environment for enterprise and help business to create jobs and prosperity in local communities all over New Zealand.” The Election Manifesto can be read at www.businessnz.org.nz

How secure is your manufacturing facility?

Wondering if your visitor and worker management process at your manufacturing facility is up to scratch? We’ve compiled a (non-exhaustive) list of questions for you. But before you read on, how would you rate your control of visitors and workers on-site? Give your facility a score out of 10. Now that you’ve got that number in your head, ask yourself the following: Are visitors able to pre-register before arriving at the facility to make registration more efficient on arrival? Is communication with guests, employees or contractors consistent, with a clear and evident process? Is there a protocol for employees when visitors are on-site? Do you have a system in place to alert employees/managers/authorities of any red flags that come up in a visitor’s registration? (e.g. someone from an organisation not allowed on-site). Are visitors issued with a visitor badge, pass or other type of visible visitor identification? Are visitors authorised by a host before they can finalise their registration? If you need to contact a visitor, employee or contractor, can you do this easily and promptly? Do you complete accurate records of workers’ induction course completions? Can you deny site or zone access to employees who do not have specific/current qualification or permissions? Are employees and contractors able to quickly alert others of new hazards on-site? Do all entrances or zones have the ability to document visitors? If a visitor entered a zone or area outside of their permitted access range, would an employee or manager be alerted immediately? Likewise, if a contractor or employee entered an unpermitted area, would a manager or security personnel be notified? Are you always aware when a contractor or employee is working alone? If a visitor has overstayed their expected time on-site, will this trigger an alert? If you answered ‘no’ to any of […]

A question of change

In August issue of NZ Manufacturer we have included comments and wish lists from business leaders as to what they would like to see from the next elected government. NZMEA wants all parties to put forward their vision for creating a more prosperous and high-value economy, with manufacturing playing a key role. BusinessNZ wants a government that will reduce taxes, fix problem legislation and boost growth in the regions. Lewis Woodward, managing director, Connection Technologies, Wellington wants overseas companies to pay and contribute more to the New Zealand economy. And he would like local businesses to be supported more. NZMEA has a whole plethora of concerns and want to see greater emphasis on the education sector to address current and future skills shortages; a minister for manufacturing appointed; and amongst others, providing the right incentives for shifting more investment into the productive sectors of our economy. We have a choice, continue with the tried and known or change government to bring in a fresh way of doing things. Systems and processes we have in place are not working for all people. Wages are not competitive enough, housing is a stressful issue, the health service struggles to keep up with a growing and aging population. And the future is changing. Disruptive technologies and Industry 4.0 are changing the face of manufacturing. Where there is change there is opportunity. When you initiate change it means you (ought to be) ahead of the game. As a small economy we are subject to world economic conditions. We cannot be isolated in our approach to export markets and need to keep up, to be competitive. The next government needs to be fiscally strong (and smart) and meet the challenges we need as a nation to bring about a sense of fair play in these extremely […]

Business Election Manifesto

BusinessNZ today released its Election Manifesto. Based on a survey of employers throughout New Zealand-, the Manifesto outlines seven priorities that business would like to see enacted after the 2017 General Election. BusinessNZ Chief Executive Kirk Hope said businesses want a Government that will reduce taxes, fix problem legislation, and boost growth in the regions. “Business wants to see a tax cut for all categories of taxpayer early in the first term of the new Government, and no new taxes of any kind.” Mr Hope said employers in many sectors were worried about being unable to fill job vacancies, and wanted action on skills. “They are unhappy with the level of skills coming out of the education system and want those skill gaps fixed by education and, if necessary, immigration. They want employees with better technical skills to help to grow more innovative and sustainable businesses.” Local government and the Resource Management Act were also a key concern “There’s a strong view that the RMA is holding the country back – 95 percent of businesses surveyed want it fixed or gone.” Businesses were also concerned about local government investing rates money in council-controlled enterprises and non-essential spending, while failing to invest in infrastructure. 65 percent wanted local government to stick to core functions like providing infrastructure. Kirk Hope said business wanted a Government that continued negotiating free trade agreements to reduce the tariff burden on New Zealand exporters. A large majority want trade agreements with the US, UK, EU and the new TPP-11. “These seven priorities if enacted by a new Government would improve the environment for enterprise and help business to create jobs and prosperity in local communities all over New Zealand.”

Building the case for manufacturing automation to drive business growth

By Shermine Gotfredsen, General Manager SEA & Oceania, Universal Robots New Zealand’s manufacturing industry has continued to expand almost every month since October 2012, based on the Bank of New Zealand-Business NZ performance of manufacturing index . The sector was lifted by a construction boom that started during the rebuild of Christchurch post-earthquake. However, manufacturing as a percentage of the economy has declined in the long-term, from about 26 percent of gross domestic production (GDP) 40 years ago to about 13 percent in 2009 . To ensure manufacturing momentum continues, New Zealand manufacturers must look to innovative new ways to achieve business growth and expansion into regional and international markets. Recent research from Universal Robots, which surveyed the Australian and New Zealand manufacturing community indicates a growing emphasis on automation and particularly robotics as a way to increase competitive advantage. Almost half of ANZ manufacturers have invested in automation in the past year. Meanwhile, a vast majority of manufacturers plan to invest in automation in the coming year, with more than half of those respondents planning to install robotics solutions. This growth in automation investment has no doubt been driven by an increased focus on business innovation. Due to New Zealand’s geographical isolation creating higher freight overheads, and greater labour costs compared to countries such as China, many local manufacturers have felt pressure to consider automation as a way to increase productivity and profits. The decision to automate is typically based on a number of factors, namely the need to improve business performance, reduce production time and improve the quantity and quality of output. One such company exploring the use of automation to enable greater production flexibility and output is Auckland based injection moulding company TCI New Zealand, which deployed Universal Robots cobots to help automate specific production processes, such […]

Supporting the regions

In the picture: Gisborne. It’s an election year. We know this because various types of carrot are being placed in front of us. Ranging from greater welfare support, more houses, improving the quality of water to…financial support for the regions. Especially on the East Coast where the levels of youth unemployment are rampant. Seeing it’s the regions that bring in the maximum revenues for government coffers this is welcome news indeed. But why does it have to take an election to put forward this plan? The problem exists in the region perpetually, so last year and the year before the financial support would have been very welcome! In bolstering the regions, we can look towards more people in employment, and hopefully the ability to commit more money to R & D. It is the regions where New Zealand’s ‘pot of gold’ lives. Primarily in land-based industries which are a far greater contributor to the economy than almost anything else apart from tourism and the construction industries which have on-going work for a while, especially in Auckland. Australia – widely known as ‘The Lucky Country’ – has done very well from the mining industry. Over recent years exports just about looked after themselves; which is good because Australians choose a lifestyle first and have been called too casual in their dedication to growth. After all, they need time for the AFL and test cricket! Our luck has not been different. It is the world’s continual need for agricultural and horticultural products of a high quality which we are renowned for. Markets that won’t fade out and offer New Zealand success for years to come. Because this is regional business it makes sense that investment in the regions can assist with the manufacturing processes of food manufacturers. By making products and […]

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