Exports sales boosted in July – 4 September

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during August 2015, shows total sales in July 2015 increased 2.48 percent (year on year export sales increased by 4.70 percent with domestic sales decreasing 0.18 percent) on July 2014.

The NZMEA survey sample this month covered NZ$511m in annualised sales, with an export content of 56 percent. Net confidence rose to 12, up from 6 in June.

The current performance index (a combination of profitability and cash flow) is at 107, up from 102.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 97, up from 96 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 107.33, up on the last result of 103.33. Anything over 100 indicates expansion. Constraints reported were 80 percent markets, 12 percent production capacity, four percent skilled staff and four percent capital.

Net 24 percent of firms reported a modest rise in productivity in July. Staff numbers for July decreased 1.78 percent year on year. Tradespersons, supervisors, managers, professional/scientists and operators/labourers all reported a moderate shortage.

“Export sales bounced back in July, moving back into expansion and improving 4.7 percent on July 2014. Domestic sales improved once again; however are still yet to break back into year on year increases, “says NZMEA Chief Executive Dieter Adam.

“Manufacturers and exporters continue to feel more positive, with sentiment improving across the board, including confidence and all three index measures up on June’s result. Staff numbers fell year on year for the first time since February, however over the last two years trend staff levels in manufacturing have been positive.

“The lower currency continues to be commented on as a positive for most, putting their margin and export competitiveness in a better position. Conversely, there are some who have seen input costs rise which can be a challenge when prices cannot be adjusted, but on balance, the lower currency is helping the manufacturing and exporting sector. We hope this relatively good period will encourage further investment in the sector to boost the future competitiveness, innovation and capability of manufacturers and exporters.

“Last weeks Overseas Merchandise Trade release by Statistics New Zealand also had some positive results for manufacturing exporters, with mechanical machinery and equipment exports experiencing an increase of 12.5 percent on July 2014, and electrical machinery and equipment increased 20 percent over the same time.” says Dieter Adam.