July 2014
www.nzmanufacturer.co.nz
BUILDNZ | DESIGNEX CANTERBURY
Manufacturing Confidence
My Red Bands are technologically advanced… Yesterday I invested in a new pair of Skellerup manufactured Red Band gumboots, (pictured) - the local Farmlands depot had a Friday 18 July special so I thought, why not, after all they are an icon among New Zealand manufactured products. Now I say invested from a technology point of view because the product’s swing-tag featured a cross-section image of a boot well supported by technical information on its features and construction. Did you know that each pair of Red Band is hand-built from 38 pieces of specially formulated natural rubber compounds; the specs have been used for over 50 years; there is a kick lug for easy removal of each boot and the heavy duty, non-clog cleated sole has above it a 5mm rubber sponge inner sole for foot comfort; yes they are comfortable. Now these Red Bands will lead a charmed life in comparison to their rural cousins. No early rising to bring in the cows or sluice out the yards. No clambering through fences, the hayshed or silage pit or trips on tractors. Sadly they will not be competing in the Taihape World Gumboot Throwing champs either. Nor will they strut the fashion catwalks; will leave that to the
-Catherine Beard, Executive Director, Manufacturing NZ
artistically decorated one sex, colour coordinated model which, by the way, I didn’t spot at Farmlands. But they will get to tread carefully between the rows of carrots, parsnips, broccoli and brussel sprouts. They will be rewarded with an occasional trip to the local dump and they will get to tread the lawns most weekends. In fact, their first outing was a trip to the washing line - nothing too strenuous. Then I noticed the “Made by Skellerup in China” notation on the swing-tag. Must admit this surprised me and I felt a twinge of disappointment that they were not made in New Zealand as I had thought. Recently Skellerup announced that they are building a new 18,900 square metre factory in Christchurch to provide improved working conditions for staff, a new facility that will capture process, flow and efficiency gains, strengthening the operations of their dairy rubberware manufacturing business. Maybe now we will see “Proudly Made By Skellerup in New Zealand” appear on future swing-tags? -Max Farndale, Publisher, MS NewsWire
www.mscnewswire.co.nz
After 21 consecutive months of expansion, confidence across the New Zealand manufacturing sector continues to be relatively high. The big question now is – how long will it last?
This is a sentiment reflected in the BusinessNZ Economic Conditions Index (ECI). The index shows business and consumer confidence indicators are down 6 on the previous quarter, and down 5 on the previous year, but are still high by historical standards.
Indicators such as the BNZ-BusinessNZ PMI suggest we can expect growth to continue across many sectors for some time yet.
Investment in new plant, machinery and equipment across all sectors up 9% on last year
In fact, the BusinessNZ Planning Forecast shows our economy is on track to achieve a short term growth rate of around 3.5 percent per annum, which is one of the highest in the OECD. Having said that, we also rate as one of the most expensive OECD countries, thanks to factors such as our production costs and higher than average tax rate. International growth forecasts suggest a reduction is coming. The June PMI shows new order levels are continuing to fall, as are reports of business confidence. So what should manufacturers make of it all? BNZ senior economist, Craig Ebert says the recent slowing seen across the sector is not a significant cause for concern. “Wading through the manufacturing component of the latest Quarterly Survey of Business Opinion, while there are clear hints of moderation, it seems mainly a settling down into normal growth patterns rather than any sort of stalling”, he said in the June PMI report.
Within this context, it seems the fall is driven by a shift to a more realistic assessment of future growth outcomes, following a somewhat euphoric rise, and that confidence remains strong. The fact manufacturers are purchasing new equipment shows they are taking advantage of the high NZ dollar, with investment in new plant, machinery and equipment across all sectors up 9% on last year. This bodes well for improving productivity which will help manufacturers cope with the high continued on page 31