Manufacturers end year on a high note
Manufacturers end year on a high note

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 percent (year on year export sales increased by 10.01 percent with domestic sales increasing by 3.30 percent) on December 2015. 

In the three months to December, export sales decreased an average of 1.4 percent, and domestic sales increased 11.7 percent on average. The NZMEA survey sample this month covered NZ$275m in annualised sales, with an export content of 60 percent.

Net confidence rose to 10, up from eight 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 percent markets and 22 percent skilled staff. A net 45 percent of respondents reported a productivity increase in December. Staff numbers decreased 7.9 percent 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 says NZMEA Chief Executive Dieter Adam.

“Export sales in December improved 10.01 percent on the same month in 2015, which was higher than the increase of 6.44 percent reported in November.  These results translated into an average month decrease of -1.4 percent in the three 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 percent 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 three months to December remained high at 11.7 percent.

“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 percent 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 percent 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 percent on December 2015, while electrical machinery and equipment fell 13.5 percent.  This is a reminder that we need to renew focus on building high-value exports and push for growth in these areas,” said Adam.    


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