Sales volatility mirrors economic uncertainty

Sales volatility mirrors economic uncertainty

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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during October 2011, shows total sales in September 2011 decreased 1.56% (export sales increased by 23.7% with domestic sales decreasing 15.4%) on September 2010.

The NZMEA survey sample this month covered NZ$635m in annualised sales, with an export content of 44%.

Net confidence dropped to -36, down from the -30 result reported last month.

The current performance index (a combination of profitability and cash flow) is at 100, up from 97.5 in August, the change index (capacity utilisation, staff levels, orders and inventories) went down to 98 from 99 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 101.5, up on August’s result of 100.25. Anything less than 100 indicates a contraction.

Constraints reported were 64% markets, 27% production capacity and 9% skilled staff.

Staff numbers for September decreased year on year by 0.9%.

“Sales volatility has continued as this month export sales expanded and domestic sales contracted. It is difficult to get a clear picture on where things are headed; some markets are doing alright at the moment but weakness in the northern economies and ever increasing debt in New Zealand is keeping firms nervous,” says NZMEA Chief Executive John Walley.

“The export sales increase can partly be attributed to a slight fall in the New Zealand Dollar since August, but the currency is still a major problem at today’s levels.”

“Production and skilled staff are still a problem in Christchurch in particular with temporary or smaller sites and the movement of staff away from the area causing problems. Elsewhere markets were the main constraint reported.”

“Confidence has now been negative for five months in a row reflecting a feeling that there is no end in sight with both trading partner performance and a less than motivated Government persisting with failing policies.”

“We have started to see some useful election policy announcements with Labour’s savings and superannuation package offering considerable benefit to the economy. We look forward to further announcements from all parties that demonstrate the recognition that the world has changed.”

“The tradable sector should be the primary political concern leading into the election as only significantly improved export earnings can dig New Zealand out of our debt hole.”

“More about this can be seen at www.changenz.co.nz.”

The New Zealand Manufacturers and Exporters Association survey gathers results from members around New Zealand. It provides a monthly snapshot of manufacturers and exporters’ sales and sentiment.

ENDS

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