The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during April 2012, shows total sales in March 2012 increased 4.87% (export sales decreased by -4.52% with domestic sales increasing 13.6%) on March 2011.
The NZMEA survey sample this month covered NZ$545m in annualised sales, with an export content of 44%.
Net confidence fell to -20, down from the +8 result reported last month.
The current performance index (a combination of profitability and cash flow) is at 99, down from 101 in February, the change index (capacity utilisation, staff levels, orders and inventories) fell to 101 from 104 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 102, down on February's result of 103. Anything less than 100 indicates a contraction.
Constraints reported were 80% markets and 20% production capacity.
Staff numbers for March decreased year on year by -5.65%.
"Domestic sales are up this month with export sales down," says NZMEA Chief Executive John Walley. "The rise in domestic sales year on year will be impacted by the weak sales experienced in March 2011 due to the February earthquake."
"Markets still remain variable according to industry with some high end products still in demand while other industries struggle."
"Declining staff numbers remain a concern and confidence has softened this month."
"Quarterly numbers show that capacity utilisation has fallen, dropping from 82 to 77 percent. There is also an expected decline in investment in plant and equipment which is always a concerning factor for the longer term outlook."
"Christchurch respondents reported ongoing earthquake problems with some insurance premiums up 300 percent, excesses expressed as a percentage of the total sum insured rather than a fixed price and limited duration business interruption cover exclusions for future stoppages. Some firms are reporting problems finding staff and the start of upwards pressure on wages from the reconstruction."
"We have seen more debate over the exchange rate in recent weeks. Some political action here is imperative if our longer term current account position is to improve. Increased export earnings are the only way out of our economic quagmire without significant pain."
"The Statistics New Zealand Business Operations Survey found that the exchange rate volatility and the exchange rate level were the two biggest barriers to generating more overseas income. These findings should spur some action from policy makers."
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