For results tables and graphs, click here.
The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during January 2017, shows total sales in December 2016 increased 7.23% (year on year export sales increased by 10.01% with domestic sales increasing by 3.30%) on December 2015.
In the 3 months to December, export sales decreased an average of 1.4%, and domestic sales increased 11.7% on average.
The NZMEA survey sample this month covered NZ$275m in annualised sales, with an export content of 60%.
Net confidence rose to 10, up from 8 in November.
The current performance index (a combination of profitability and cash flow) is at 99.3, up from 98.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 101, with no change from the last survey, and the forecast index (investment, sales, profitability and staff) is at 104.5, up on the last result of 103.2. Anything over 100 indicates expansion.
Constraints reported were 78% markets and 22% skilled staff.
A net 45% of respondents reported a productivity increase in December.
Staff numbers decreased 7.9% year on year in December.
Supervisors, tradespersons, managers, professional/scientists and operators/labourers reported a moderate shortage.
“December’s manufacturing sales results showed a good bounce back from the results seen in October, September and July, particularly in export sales – manufacturers ended the year on a high note.” Said Dieter Adam.
“Export sales in December improved 10.01% on the same month in 2015, which was higher than the increase of 6.44% reported in November. These results translated into an average month decrease of -1.4% in the 3 months to December, which was still held down in the negative due to a poor month for exports in October.
“Domestic sales in December stayed positive with a 3.3% increase on December 2015. This was, however, a moderation on the exceptional growth felt in the previous three months. The average monthly growth of domestic sales in the 3 months to December remained high at 11.7%.
“We can now get a good picture on how the manufacturing sector fared in 2016. Domestic sales experienced an average monthly growth of 5.8% on the previous year’s months over the last 12 months, representing a positive trend of domestic sales. Export sales saw an average monthly growth of 2.1% in the same period. 2016 most definitely had its ups and downs for manufacturing sales, but overall, the trend showed solid growth for the year overall.
“The downward trend in export sales towards the end of the year was concerning – though the last two months of the year did turn this around somewhat. Weak export numbers have been reflected in the Statistics New Zealand numbers – in December, mechanical machinery and equipment exports fell 8.83% on December 2015, while electrical machinery and equipment fell 13.5%. This is a reminder that we need to renew focus on building high-value exports and push for growth in these areas. ” Said Dieter.
(PR.co.nz) NZ’s largest Trade Show organiser, XPO Exhibitions (XPO), is working hard to continue the growth of SouthMACH at a time when there’s a positive vibe in the manufacturing and engineering industry. On the back of a great event in 2015 (the first under XPO’s new ownership) and a fantastic EMEX 2016 (both of which experienced significant increases in exhibitor & visitor attendance), SouthMACH 2017 will be held at the Horncastle Arena, Addington, Christchurch from 24-25 May. Showcasing the very latest innovations, equipment, technology, services and products to industry professionals, the event again will feature a comprehensive educational and professional development seminar series with keynote speakers and workshops.
This year’s event includes a number of soon to be announced special features showcasing amazing product innovations from the South Island’s leading Design and Manufacturing Companies. These companies are leading the world in technology advancement and innovation as well as providing an example of great collaboration between industrial designers and manufacturing industries.
SouthMACH 2017 is well on track to deliver a record number of exhibitors showcasing products and services that reach across the current themes within the technology sector such as Robotics and Automation, 3D Printing, Energy Efficiency and Industry 4.0. A full seminar program over the two days will touch on these themes and provide a forum for education, discussion and the sharing of knowledge and expertise, critical in the sustainability and growth of the industry.
Another important issue and a focus for SouthMACH 2017 is the shortage of skilled staff within the manufacturing industry in New Zealand and therefore business continuity and efficiency. We’re also excited to announce that Competenz (in collaboration with NZMEA) will be running Apprenticeship ‘best practice’ workshops on both days for employers to de-mystify the process of employing an apprentice. Also: school leavers will appreciate an increased awareness of this alternative pathway by participating in the speed interview sessions that will be part of the workshops.
SouthMACH 2017 is supported by more industry associations and professional bodies than ever. The New Zealand Manufacturers and Exporters Association, Maintenance Engineers Society of New Zealand and Canterbury University are now also joined by Callaghan Innovation. They all will bring their specific expertise to SouthMACH and are there to support the industry through sharing their knowledge and expertise.
If your customers are manufacturing or processing goods or services, using General Engineering, Machine and Metalworking Technology, Plant Automation & Maintenance, Engineering Software & Computerisation, Welding, Cutting & Plastics Engineering, Fluid Engineering or measurement, Control & Instrumentation, SouthMACH 2017 offers opportunities you can’t afford to miss.
SouthMACH 17 will provide an effective, engaging and dynamic forum allowing those in the industry to connect and grow, and in doing so, foster the growth and development of many of the South Islands and New Zealand’s manufacturing, engineering and technology associated businesses.
Prime locations are limited so enquire today at www.southmach.co.nz or call or email Exhibition Sales Manager, Aad van der Poel on 09 976 8350 / 021 314 199 This email address is being protected from spambots. You need JavaScript enabled to view it.
Today we have learnt of the sale of Sistema Plastics to US multinational Newell Brands, in addition to the recent sale of Compac Sorting Equipment, another highly successful New Zealand manufacturing company, to Norwegian company TOMRA in October, say the New Zealand Manufacturers and Exporters Association (NZMEA).
NZMEA Chief Executive Dieter Adam says, “These sales, alongside the recent announcement of the closure of the General Cable plant in Christchurch, may well leave some wondering what is happening to manufacturing in New Zealand. In reality, the situation is ‘steady as she goes’, with manufacturing continuing to be the second-largest contributor to GDP and showing moderate long-term growth rates with less of the huge swings in export revenue, for example, that characterises the commodities part of our economy.
“Within the manufacturing sector there is constant change, with companies closing down and new ones arising, and others growing their business. Most of our manufacturers are fully exposed to the rough winds of global competition, whether that’s in exporting, or in competing with importers in our domestic market, not to mention the effect of an overvalued currency hitting margins and competitiveness.
“Our manufacturers have made big changes, especially post-GFC, to get and stay fighting-fit in tough markets, and sometimes conditions change to an extent that makes it unsustainable to continue.
“While each story needs to be examined on its own merits, there are common elements between Compac and Sistema. Both have been built into large successful New Zealand manufacturing companies over the past three decades by owners who have put a lot of hard work and money into it. They now want to exit the company while ensuring the new owners will keep it on a steep growth path, and preserving jobs in New Zealand.
“One might have preferred for the business to ‘stay in New Zealand hands’, but the reality is that not only are our capital markets thin as we collectively prefer to invest in real estate rather than the productive parts of our economy, but the deals also make a lot of commercial sense, as the new owners in both cases provide access to their resources, including vast marketing, sales and distribution networks.
"As Brendan Lindsay says “Newell has the expertise and market access that will enable them to take the business to the next level and create new opportunities for the company, especially in North America.” Add to that a huge investment in a new production facility in Auckland and an employment guarantee for its 700 staff and you have a reasonable prospect of this deal working well for New Zealand, with the only possible downside being the common international business practice to minimise local tax obligations leading to a loss of tax revenue for New Zealand.
“It is vital that we keep building our manufacturing base and capability to produce more high-value products, especially when the manufacturing eco-system relies on a network of capable manufacturers making up each other’s supply chains and building the industry’s general ability to produce complex goods and skills. Our focus needs to be on building an environment where manufacturing can grow and prosper. The availability of suitable skilled staff, keeping up with changes in manufacturing technology, and a less punishing exchange rate especially with Australia, our main trading partner, will be critical for that.
“We hope to see quality discussion on how to make the most of our manufacturing base to grow exports and jobs going into the next election.” Says Dieter.
The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during November 2016, shows total sales in October 2016 decreased 6.81% (year on year export sales decreased by 20.72% with domestic sales increasing by 20.14%) on October 2015.
In the three months to October, export sales decreased an average of 7.0%, and domestic sales increased 13.9% on average.
The NZMEA survey sample this month covered NZ$288m in annualised sales, with an export content of 56%.
Net confidence rose to 42, up from -23 in September.
The current performance index (a combination of profitability and cash flow) is at 98, up from 94.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 101, up from 99 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 105.5, up on the last result of 102.33. Anything over 100 indicates expansion.
Constraints reported were 63% markets, 16% skilled staff, 10.5% capital and 10.5% production capacity.
A net 5% of respondents reported a productivity decrease for October.
Staff numbers decreased 1.29% year on year in October.
Supervisors, tradespersons, managers, professional/scientists and operators/labourers reported a moderate shortage.
“Export sales continued their downward trend also experienced in September, with October export sales decreasing 20.72% on October 2015, with an average year on year decrease of 7% in the three months to October. Taking a longer view, export sales have been flat at an average year on year monthly decrease of 0.3% over the last 12 months.” Said Dieter Adam.
“Domestic sales again saw better results, increasing 20.14% on October 2015, and continuing the recent positive streak, with an average year on year growth of 13.9% in the three months to October. Domestic sales have held a positive trend, with an average year on year monthly increase of 5.4% over the last 12 months.
“Despite the fall in export sales, confidence and all three index measures, performance, forecast and change, all improved on September. Market conditions remain the largest reported constraint to growth. Reported profitability has been trending downwards throughout 2016 for manufacturers.
“The recent challenges for exporters reported in our survey was also reflected in the latest Overseas Merchandise Trade numbers from Statistics New Zealand for October. Export values for mechanical machinery and equipment decreased 7% on the previous month, and saw a decrease of 15.62% compared to October 2015. Electrical machinery and equipment exports improved 2.8% on the previous month, but felt a decrease of 13.59% on the same month last year. In the last three months, exports sales for both these categories have been well below the average experienced in the previous year.
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Manufacturers continue to face additional freight costs, as well as delays and disruptions to supply chains, with the road and rail closures following the Kaikoura Earthquake, say the New Zealand Manufacturers and Exporters Association (NZMEA).
NZMEA Chief Executive Dieter Adam says, “We have had feedback from manufacturing members describing significant delays for some products to reach their destination, some with uncertainty as to when this will be resolved.
“Manufacturers are facing freight surcharges of around 15% currently, with other significant costs in adjusting and adapting their supply chains.
“We support Mainfreight’s call for KiwiRail to open up a dedicated coastal shipping option to take the pressure off roads that are not suitable for the level of freight. Given the predicted long time frames to fix the damaged roads and rail services, this kind of solution would be a huge help to restore more normal operating conditions for manufacturers and other businesses.
“Finding and implementing such a solution is a matter of urgency. This is not only a commercial problem, but one that hits manufacturers' viability and ability to compete, disrupting vital supply chains. The Government should be willing to step in to help facilitate a solution if one cannot be found soon.” Said Dieter.
An NZMEA press release - Friday 2 December 2016
It is very unfortunate to hear of the proposed closure of manufacturer General Cable in Christchurch, with the loss of up to 170 quality jobs and affecting other local manufacturers supplying them. While conditions for many manufacturers have improved in recent years, this shows that pressure and uncertainty remains, say the New Zealand Manufacturers and Exporters Association (NZMEA).
NZMEA Chief Executive Dieter Adam says, “General Cable has been a solid part of the Christchurch manufacturing industry since the 1950’s, and it is sad to hear they may be closing. We hope their staff can be employed by other manufacturers in the area.
“Manufacturers do not operate in isolation, due to the complex supply chains that mean many other New Zealand manufacturers supply parts to companies like General Cable. A loss in one area can have wider effects than just the immediate loss of jobs and income. We need to keep a broad base of manufacturing in New Zealand and find ways to improve the manufacturing eco-system.
“It is a reminder that we cannot be complacent, there is more that can be done to help manufacturing businesses thrive in New Zealand, keeping capability here, along with jobs and vital export income. We hope to see quality discussion on how to make to most of our manufacturing base to grow exports and jobs going into the next election.” Says Dieter.
An NZMEA release
The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during October 2016, shows total sales in September 2016 decreased 6.72% (year on year export sales decreased by 11.72% with domestic sales increasing by 17.12%) on September 2015.
In the 3 months to September, export sales decreased an average of 7.0%, and domestic sales increased 5.2% on average.
The NZMEA survey sample this month covered NZ$276m in annualised sales, with an export content of 78%.
Net confidence fell to -23, down from 22 in August.
The current performance index (a combination of profitability and cash flow) is at 94.3, down from 100.7 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 99, down from 101 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 102.33, down on the last result of 109.2. Anything over 100 indicates expansion.
Constraints reported were 77% markets, 15% skilled staff and 8% capital.
There was no net reported productivity increase for September.
Staff numbers decreased 2.81% year on year in September.
Supervisors, tradespersons, managers, professional/scientists and operators/labourers reported a moderate shortage.
“Coming off the solid increase in export sales felt in August, year on year export sales in September moved back into negative, showing an 11.72% fall on sales in September 2015. This lead to an average monthly decrease of 7% of export sales in the three months to September – extending this out to over the last 12 months gives an average export sales growth of 0.8%.” Said Dieter Adam.
“The majority of manufacturing sales reported in September came from exports, at a reported 78% of total sales from respondents. September domestic sales in comparison to exports saw increases on the previous year. Domestic sales increased 17.12% on September 2015. This gave an average increase of 5.2% in the three months to September, and 3.7% over the last 12 months.
“Last month’s increase in confidence was reversed, with net confidence down to -23 in September. This was the first time net confidence has been negative since May 2015, and the lowest result since March 2014.
“The fall in confidence was accompanied by reductions in all three index measures. The performance index fell back into contraction at 94.3, the lowest level since March 2015. The forecast index fell back on the highs felt last month, but remained in expansion at 102.33, while the change index move down to 99, from 101 in August.
“These results in September do show some contrast with other measures, such as the PMI, which moved higher in September from August. Domestic sales are more consistent with the PMI. Some of the decline in exports we observed may be explained by lumpy sales month by month, but when paired with the lower confidence and index measures, it does suggest some challenges hitting export sales in September. The currency has fallen back from highs, but remains at a level where it is adding pressure on exporters and import competition manufacturers.” Said Dieter.
For results table and historical series, click here.
The Government is right to make adjustments to our immigration system in response to high numbers causing housing and infrastructure pressures. However, the focus on skilled migrants may add pressure on manufacturers and exporters who are already finding it hard to get skilled staff they need to grow, say the New Zealand Manufacturers and Exporters Association (NZMEA).
NZMEA Chief Executive Dieter Adam says, “Government has finally acknowledged that the mismatch between net inward migration and infrastructure development - housing first and foremost - particularly in Auckland.
“Unfortunately, the changes introduced constitute a significant lift in barriers for skilled migrants, while leaving other migrant categories largely unchanged.
“New Zealand businesses, right across all sectors, are increasingly held back from growing by a lack of highly skilled workers. The reasons behind this are complex, including a tertiary education policy that is not meeting our skills needs, and immigration alone cannot be the whole answer, now or in the long term.
“In the short term, however, allowing employers to find highly skilled staff abroad that are simply not available domestically, is important for the future economic development of New Zealand. Highly skilled workers means people capable of operating complex, computer controlled machinery in the manufacturing sector, for example. The government claims that the changes it introduced yesterday “will prioritise access for higher-skilled SMC migrants ...” – Given the Government’s sketchy track record to date in managing the skilled migrant scheme to match what the economy most urgently needs, it remains to be seen whether that will actually be the case.
“We believe our immigration system is leaky at a different point, people coming in on a student visa and then being allowed to seek employment when they have completed their studies, which can be after as little as one year.
“New Zealand approved visas for around 85,000 overseas students in 2015, and it would be interesting to see how many of these are able to gain employment at the end of their studies. There are reports that 50% of all skilled migrant visa applications these days come from foreign students. These students may be highly skilled in their subject of study, but often have few of the skills and experience industry needs and as a consequence end up in low-skills jobs in retail or tourism, for example.
“We would also like to see a more in-depth review on how our immigration system can best serve New Zealand over-time and provide skilled people to fill skill gaps industry face now, and into the future." Says Dieter.
Palace of the Alhambra, Spain
By: Charles Nathaniel Worsley (1862-1923)
From the collection of Sir Heaton Rhodes
Oil on canvas - 118cm x 162cm
Valued $12,000 - $18,000
Offers invited over $9,000
Contact: Henry Newrick – (+64 ) 27 471 2242
Mount Egmont with Lake
By: John Philemon Backhouse (1845-1908)
Oil on Sea Shell - 13cm x 14cm
Valued $2,000-$3,000
Offers invited over $1,500
Contact: Henry Newrick – (+64 ) 27 471 2242