A return to growth in March - 8 May

A return to growth in March - 8 May

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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during April 2015, shows total sales in March 2015 increased 22.38% (year on year export sales increased by 26.63% with domestic sales increasing 13.6%) on March 2014.

The NZMEA survey sample this month covered NZ$380m in annualised sales, with an export content of 70%.

Net confidence rose to -5, up from -13 in February.

The current performance index (a combination of profitability and cash flow) is at 94.3, down from 95.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 100, up from 99 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 100.83, down on the last result of 102.33. Anything over 100 indicates expansion.

Constraints reported were 68% markets, 23% skilled staff, and 9% production capacity.

Net 9% of firms reported a modest rise in productivity in March.

Staff numbers for March increased 5.51% year on year.

Tradespersons, supervisors, managers, professional/scientists and operators/labourers all reported a moderate shortage.

“This month domestic sales again experienced growth, showing year on year turnover increases for the fourth month in a row. Export sales bounced back in March, a significant improvement from the large fall felt in February. Overall, a positive sales result for March,” says NZMEA President Tom Thomson.

“Confidence improved a little on February, but remained in negative territory. The change index measure improved slightly on last month, while the performance and forecast indexes fell back.

“The market constraint increased significantly on last month, reflecting continued pressure of a high exchange rate against the AUD and on a TWI basis and some continued soft international markets, particularly in Australia and Europe. The production capacity constraint decreased considerably on last month. Finding skilled staff is becoming more difficult; this constraint experienced its highest value since April 2011.

“The strength of our dollar against the AUD continues to be reported as a major concern in the survey. With inflation well below target, and wage inflation lower than expectations, the Reserve Bank of New Zealand (RBNZ) could cut the OCR to bring our interest rates more in line with that of the rest of the world, and relieve pressure on our exchange rate, putting our exporters and import competing manufacturers on a more level playing field to succeed. However, more needs to be done to tackle risks in the Auckland housing market.” says Tom Thomson.

ENDS

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