Which manufacturing crisis?

The Labour/Green/NZ First/Mana opposition has been doing its best to manufacture a crisis about a manufacturing crisis.

Which crisis it is they’re concerned about is unclear because manufacturing here kept growing in the December quarter despite falls in sheep and dairy industries.

Total manufacturing volumes rose for the December 2012 quarter, despite a small fall in meat and dairy product manufacturing, Statistics New Zealand said today.

After adjusting for price changes and seasonal variations, the volume of total manufacturing sales rose 1.5 percent, while the meat and dairy manufacturing sales volume fell 1.1 percent.

“While still an increase, this is something of a reversal from the previous quarter, when high meat and dairy manufacturing sales more than compensated for falls in other manufacturing industries,” industry and labour statistics manager Blair Cardno said.

“This quarter, seven of the other 12 manufacturing industries contributed to the overall increase.”

The largest increases this quarter were:

  • metal product manufacturing, up 5.4 percent
  • petroleum and coal product manufacturing, up 6.4 percent.

These two industries partly recovered from decreases in recent quarters.

The trend for the manufacturing sales volume, which gives a longer-term picture of movements, has been rising since late 2011.

In current prices, the total manufacturing sales value was flat, up just $1 million to a seasonally adjusted $22.8 billion.

Other figures support the case for optimism.

Doug Steel, economist at Bank of New Zealand, said the increase in volumes continued the trend of the past three quarters, though “prices were not all that flash.”

“The rundown in stocks give you a bit of optimism for 2013 if demand does strengthen on construction,” he said.

The official government figures come the same day as a New Zealand Manufacturers’ and Exporters’ Association survey showed an increase in export sales in January compared to a year earlier.

The NZMEA has been a vocal critic of the government and Reserve Bank for not providing more support for local firms competing with cheap imported rivals and reduced competitiveness abroad due to the strength of the currency.

Last month, the Bank of New Zealand-Business NZ performance of manufacturing index showed the sector grew at its fastest pace in eight months in January, with the strongest growth in Canterbury/Westland probably reflecting demand for building materials.

Some sectors aren’t doing so well, some are doing better.

That’s normal and while a decline in a sector and job losses are hard for those involved they’re not symptoms of a crisis.

3 Responses to Which manufacturing crisis?

  1. Viv says:

    To claim an increase in coal and petroleum sales as ‘evidence’ that manufacturing is ok is a clear example of spin doctoring. The coal and petroleum industries extract non renewable resources. What proportion of the sales actually come from manufactured products made from these materials? Because an increase in fossil fuel sales does not make up for a decrease in actual value added manufacturing.


  2. TraceyS says:

    “The trend for the manufacturing sales volume, which gives a longer-term picture of movements, has been rising since late 2011.”

    So where’s the crisis? Are they trying to talk one up?


  3. Viv says:

    It appears that coal and petroleum are being counted as ‘manufactured’ products.


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