More focus needed on manufacturing

22 June 2005

More focus needed on manufacturing

Business NZ is calling for more focus on manufacturing. Chief Executive Phil O'Reilly says New Zealand's focus on the sector is less than in many other countries.

"Our manufacturers have to maintain competitiveness overseas while facing significant costs and compliance issues here at home. Neither of the two main political parties has a portfolio or a spokesperson for manufacturing.

"Yet manufacturing is vitally important - having a critical mass of manufacturing firms is often what makes the difference between a developed and a developing economy.
Exporting manufacturers earn us valuable foreign exchange. Manufactured goods now make up 43% of all exports, and rising.

This is in spite of the fact that exporting manufacturers are suffering greatly from the high dollar - being an exporting manufacturer right now would be a very hard place to be. Many of them are just hanging in there, continuing to service their export markets, despite the fact that the high NZ dollar has been ripping their profit to shreds for more than a year now.

"They already have a harder job than their overseas competitors because their freight costs are greater and because our domestic market is smaller, so Business NZ is very keen to see more focus at the political level on this important sector. The answer is not handouts, but improvements in the areas that impact most on manufacturers: infrastructure, regulatory efficiency and trade policy."

Business NZ today published an analysis of the needs of the manufacturing sector: 'Manufacturing Perspectives'. (downloadable at www.businessnz.org.nz or from link: 'Manufacturing Perspectives')

Some of its recommendations are:

Offsetting high international freight costs by making domestic transport as efficient as possible (more expenditure on roading)

A better system to encourage Govt departments and SOEs to buy NZ-made products

Reducing compliance costs e.g. in employment, taxation and environmental law so manufacturing exporters can be more internationally competitive

Govt commitment to policies that would allow a free trade agreement with the US

Greater on-the-ground help in export markets Improvements to the CER regime

ENDS

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