Manufacturing sales grow

CECILE MEIER
Last updated 11:14 08/08/2014

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Manufacturers' sales continue to grow, but exporters remain worried about the high New Zealand dollar.

The latest New Zealand Manufacturers and Exporters Association survey of business conditions shows total manufacturing sales in June increased by 28.38 per cent.

Year-on-year export sales increased by 30.45 per cent, with domestic sales increasing 26.38 per cent.

The survey sample for June covered $552 million in annualised sales, with an export content of 50 per cent.

Association chief executive John Walley said June had been "another very good month for manufacturers and exporters, with turnover improving both domestically and in exports".

However, manufacturers surveyed were less confident about the future than in the previous survey.

"While sales continue to grow, comments indicate there is considerable concern around the dollar," Walley said.

"The market constraint, at its highest since May 2013, indicates some demand softness across trading partners. Production capacity was not indicated as a major problem in our last survey.

"In the latest OCR [official cash rate] statement, the Reserve Bank of New Zealand made a real effort to talk down our currency, which was not responding to the significant fall in dairy prices since January 2014. This had some success, with the currency pegging back nearly 4 per cent after approaching a post-float high in early July.

"The fact the currency has remained above January levels despite these falls must bring into question the idea of auto-stabilisation of returns around commodity prices and exchange rates.

"The RBNZ need to do more than just talk to bring the currency down to justifiable and sustainable levels."

Staff numbers for June increased year on year by almost 5 per cent.

Manufacturers wanting tradespeople, operators-labourers, supervisors, managers and professional-scientists all reported a moderate shortage.

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