Man­u­fac­tur­ing con­fi­dence hit in Septem­ber

DEMM Engineering & Manufacturing - - NEWS -

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Man­u­fac­tur­ers and Ex­porters As­so­ci­a­tion (NZMEA) Survey of Busi­ness Con­di­tions com­pleted dur­ing Oc­to­ber, shows to­tal sales in Septem­ber de­creased 6.72 per­cent (year on year ex­port sales de­creased by 11.72 per­cent with do­mes­tic sales in­creas­ing by 17.12 per­cent) over Septem­ber 2015.

In the three months to Septem­ber, ex­port sales de­creased an av­er­age of 7.0 per­cent, and do­mes­tic sales in­creased 5.2 per­cent on av­er­age.

The NZMEA survey sample this month cov­ered NZD276m in an­nu­alised sales, with an ex­port con­tent of 78 per­cent.

Net con­fi­dence fell to -23, down from 22 in Au­gust.

The cur­rent per­for­mance in­dex (a com­bi­na­tion of prof­itabil­ity and cash flow) is at 94.3, down from 100.7 last month, the change in­dex (ca­pac­ity util­i­sa­tion, staff lev­els, or­ders and in­ven­to­ries) was at 99, down from 101 in the last survey, and the fore­cast in­dex ( in­vest­ment, sales, prof­itabil­ity and staff) is at 102.33, down on the last re­sult of 109.2. Any­thing over 100 in­di­cates ex­pan­sion.

Con­straints re­ported were 77 per­cent mar­kets, 15 per­cent skilled staff and eight per­cent cap­i­tal.

There was no net re­ported pro­duc­tiv­ity in­crease for Septem­ber.

Staff num­bers de­creased 2.81 per­cent year on year in Septem­ber.

Su­per­vi­sors, trades­per­sons, man­agers, pro­fes­sional/scientists and op­er­a­tors/labour­ers re­ported a mod­er­ate short­age.

“Com­ing off the solid in­crease in ex­port sales felt in Au­gust, year on year ex­port sales in Septem­ber moved back into neg­a­tive, show­ing an 11.72 per­cent fall on sales in Septem­ber 2015. This lead to an av­er­age monthly de­crease of 7 per­cent of ex­port sales in the three months to Septem­ber – ex­tend­ing this out to over the last 12 months gives an av­er­age ex­port sales growth of 0.8 per­cent,” said NZMEA chief ex­ec­u­tive Di­eter Adam.

“The ma­jor­ity of man­u­fac­tur­ing sales re­ported in Septem­ber came from ex­ports, at a re­ported 78 per­cent of to­tal sales from re­spon­dents. Septem­ber do­mes­tic sales in com­par­i­son to ex­ports saw in­creases on the pre­vi­ous year. Do­mes­tic sales in­creased 17.12 per­cent on Septem­ber 2015. This gave an av­er­age in­crease of 5.2 per­cent in the three months to Septem­ber, and 3.7 per­cent over the last 12 months.

“Last month’s in­crease in con­fi­dence was re­versed, with net con­fi­dence down to -23 in Septem­ber. This was the first time net con­fi­dence has been neg­a­tive since May 2015, and the low­est re­sult since March 2014.

“The fall in con­fi­dence was ac­com­pa­nied by re­duc­tions in all three in­dex mea­sures. The per­for­mance in­dex fell back into con­trac­tion at 94.3, the low­est level since March 2015. The fore­cast in­dex fell back on the highs felt last month, but re­mained in ex­pan­sion at 102.33, while the change in­dex move down to 99, from 101 in Au­gust.

“These re­sults in Septem­ber do show some con­trast with other mea­sures, such as the PMI, which moved higher in Septem­ber from Au­gust. Do­mes­tic sales are more con­sis­tent with the PMI. Some of the de­cline in ex­ports we ob­served may be ex­plained by lumpy sales month by month, but when paired with the lower con­fi­dence and in­dex mea­sures, it does sug­gest some chal­lenges hit­ting ex­port sales in Septem­ber. The cur­rency has fallen back from highs, but re­mains at a level where it is adding pres­sure on ex­porters and im­port com­pe­ti­tion man­u­fac­tur­ers.”

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