Manufacturers' confidence up

Manufacturers are feeling more confident even as sales fell further during January, the New Zealand Manufacturers and Exporters Association's latest survey of business conditions shows.

Total sales among the survey sample fell 3 percent, with export sales down 32 percent and domestic sales up 15 percent on a year earlier.

Net confidence rose to 45, from minus 11 the previous month.

Association chief executive John Walley said that although confidence had turned positive after two years in negative territory, that would be little comfort until sales and jobs started to pick up.

Markets were reportedly starting to improve, but the exchange rate continued to hit profitability, even in industries where sales had improved, Mr Walley said.

A lower cross rate against the Australian dollar and growth in Australia would help manufacturers selling across the Tasman, particularly if they bought materials in United States dollars.

While the survey might indicate some improvement, it did not suggest the V-shaped recovery that had been hoped for.

"Lower sales and a drop in staff numbers show that, at best, we are bumping along the bottom," Mr Walley said.

The survey sample covered $452 million in annualised sales, with an export content of 28 percent.

The current performance index (a combination of profitability and cash flow) is at 100.5, down from 101.5 in December, the change index (capacity utilisation, staff levels, orders and inventories) rose to 99 from 98 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 104.5, up on December's result of 101. Anything less than 100 indicates a contraction.

- NZPA