Leading indicator of real economy falling
With a drop in sales recorded by the Economic Survey of Manufacturing for the March Quarter, the relative strength of
the kiwi dollar is no longer an accurate reflection of New Zealand's relative economic strength, the Employers & Manufacturers Association (Northern) says.
"The Economic Survey of Manufacturing is the most precise indicator of the country's real performance, and the figures
for the March quarter show sales down 2% on the December quarter as well as about 2% down in real terms on the same
quarter of last year," said Alasdair Thompson, EMA's chief executive.
"Stockpiles of finished goods ballooned 40.5% from the same quarter of the previous year and investment slumped 30.9 per
cent.
"The economy is rapidly cooling.
"Plainly the high value of the kiwi dollar is no longer justified and neither are our high interest rates.
"Manufacturers are blaming our relatively high interest rates for underpinning the US/NZ cross rate and penalising their
export competitiveness.
"They say the high exchange rate is the number one reason for a lack of export progress, and for sales slipping on the
local market.
"With the world economy in the doldrums they are finding exporting
tougher.
"Other uncertainties expressed recently in our ANZ Business New Zealand Performance of Manufacturing Index include:
* costs associated with the new workplace safety amendment, particularly the prohibition against insuring against fines;
* shortages of vocational skills, and
* worries about new costs associated with changes to the Holidays Act."