Slow start to 2017 says NZMEA

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Man­u­fac­tur­ers and Ex­porters As­so­ci­a­tion (NZMEA) Sur­vey of Busi­ness Con­di­tions, com­pleted dur­ing Fe­bru­ary 2017, shows to­tal sales in Jan­uary 2017 de­creased 2.49 per­cent (year on year ex­port sales de­creased by 3.86 per­cent with do­mes­tic sales de­creas­ing by 0.66 per­cent) on Jan­uary 2016.

In the three months to Jan­uary, ex­port sales in­creased an av­er­age of 4.2 per­cent, and do­mes­tic sales in­creased 4.8 per­cent on av­er­age.

The NZMEA sur­vey sam­ple this month cov­ered NZ$232m in an­nu­alised sales, with an ex­port con­tent of 56 per­cent. Net con­fi­dence fell to -7, down from 10 in De­cem­ber.

The cur­rent per­for­mance in­dex (a com­bi­na­tion of prof­itabil­ity and cash flow) is at 101.3, up from 99.3 last month, the change in­dex (ca­pac­ity util­i­sa­tion, staff lev­els, or­ders and in­ven­to­ries) was at 101, with no change from the last sur­vey, and the fore­cast in­dex (in­vest­ment, sales, prof­itabil­ity and staff) is at 105.3, up on the last re­sult of 104.5. Any­thing over 100 in­di­cates ex­pan­sion.

Con­straints re­ported were 75 per­cent mar­kets, 17 per­cent skilled staff and eight per­cent cap­i­tal. A net 13 per­cent of re­spon­dents re­ported a pro­duc­tiv­ity in­crease in Jan­uary. Staff num­bers de­creased 4.10 per­cent year on year in Jan­uary. Su­per­vi­sors, trades­per­sons, man­agers, pro­fes­sional/sci­en­tists and op­er­a­tors/labour­ers re­ported a mod­er­ate short­age.

“2017 has seen a slow start for man­u­fac­tur­ers, ex­pe­ri­enc­ing falls in both do­mes­tic and ex­port sales on Jan­uary 2016. This comes af­ter a strong end to the year for Novem­ber and De­cem­ber, though the ex­port sales did ex­pe­ri­ence chal­lenges prior to this in Oc­to­ber, Septem­ber and July.” Said NZMEA Chief Ex­ec­u­tive Di­eter Adam.

“Do­mes­tic were flat in Jan­uary, fall­ing 0.66 per­cent on the same month in 2016. The three-month av­er­age for do­mes­tic sales stayed rel­a­tively strong at 4.8 per­cent. Ex­port sales de­creased 3.86 per­cent on Jan­uary 2016, but sales on the three-month av­er­age mea­sure say an in­crease of 4.2 per­cent, boosted by the im­pres­sive in­creases felt in Novem­ber and De­cem­ber.

“Sen­ti­ment mea­sures were mixed in Jan­uary – net con­fi­dence fell on De­cem­ber, slip­ping into the neg­a­tive. In con­trast, our in­dex mea­sures of per­for­mance and fore­cast in­creased, both sit­ting in ex­pan­sion, while the change in­dex re­mained the same as in De­cem­ber. Staff num­bers fell 4.10 per­cent on Jan­uary 2016 – this may be a re­flec­tion of some of the chal­lenges in ex­port sales over the last six months.

“For com­par­i­son, in the re­cent Over­seas Mer­chan­dise Trade re­lease from Sta­tis­tics New Zealand, the value of me­chan­i­cal ma­chin­ery and equip­ment ex­ports in­creased 1.5 per­cent in Jan­uary on the pre­vi­ous month, but re­mained 5.4 per­cent lower than Jan­uary 2016. Elec­tri­cal ma­chin­ery and equip­ment ex­ports were flat in Jan­uary, with an in­crease of 0.3 per­cent on the pre­vi­ous month. These did, how­ever, ex­pe­ri­ence a 9.5 per­cent drop on Jan­uary 2016.

“All in all, we need to keep in mind that sur­veys of the man­u­fac­tur­ing sec­tor will be sub­ject to fluc­tu­a­tions. Weak trends at least aren’t that easy to spot, even when look­ing at quar­terly fig­ures. We also need to be aware that our man­u­fac­tur­ing sec­tor is quite closely linked to global trends, and that glob­ally there is a lot of un­cer­tainty at the mo­ment, es­pe­cially where de­mand for cap­i­tal goods is con­cerned. A lot of what our mem­bers man­u­fac­ture are com­po­nents or sub-sys­tems for cap­i­tal goods pro­duced over­seas.” said Adam. FOR RE­SULTS TA­BLES AND GRAPHS:

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