Exporters poised for market share leap

Media Release September 8th, 2000

Exporters poised for market share leap

Exporters of manufactured goods and other high value products are ideally poised to raise their prices in real terms and increase market share overseas, says the Employers and Manufacturers Association (Northern).

"Our kiwi dollar has sunk so low that our exporters of top quality manufactures and high value goods should seriously consider how they can raise their prices, in addition to taking exchange rate gains," said Alasdair Thompson, EMA's chief executive.

"Raising the NZ dollar price of our exports is good as it delivers gains to our terms of trade.

"Many producers cannot lift prices on the domestic market, to compensate for the higher prices they have to pay for imported components and raw materials, because local demand overall is extremely soft.

"But with the NZ dollar having fallen lower than other currencies against the yen and the US dollar, we can either raise our export prices - the quality of New Zealand made will certainly sustain bigger margins - or alternatively the opportunities to expand market share offshore are brilliant, particularly in Australia.

"The latest wholesale inflation figures for manufactured inputs in Australia show price rises of 16 per cent for the year to June, and wage increases pushing over 10 per cent on an annualised basis.

"Australian consumer inflation was running at over three per cent even before GST was introduced.

"Selling New Zealand made goods beneath these levels of price pressure opens up some exciting possibilities, both for new exporters and for existing exporters wanting greater market share.

"New Zealand needs a sustained period of low exchange rates, though not this low, to attract investment into exporting so we can earn our way back from excessive levels of indebtedness.

"Over the past decade we imported beyond our means and took our focus off the only way we have available to raise our standards of living, which is through exporting."

Further comment: Alasdair Thompson tel 09 367 0911 (bus) 09 303 3951 (hme) 025 982 024

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