Industries confident on exports, survey finds

David Clark.
David Clark.
Another survey has dented claims by Opposition political parties that New Zealand's exporting manufacturing industries are in a state of crisis.

Labour leader David Shearer and economic development spokesman David Clark were hot on the case yesterday, claiming the Government had its head buried when it came to the state of the manufacturing industries.

However, the annual DHL Export Barometer - which canvassed 277 firms in the manufacturing, agriculture, tourism and professional services sectors - found 59% of companies were confident export orders would increase in the next 12 months, up from the record low of 51% in last year's survey.

Fifty-four percent of exporters were expecting profitability to rise over the same period, despite the strong currency.

''Overall, we're seeing exporters adopt strategies that focus on what they can control, as opposed to being held to ransom by external factors that they can't control,'' DHL Express New Zealand country manager Tim Baxter said.

The DHL survey said exporters were using a range of methods to deal with the dollar such as refining their offering (32%), repricing (31%), looking at new markets (26%) and competing online (23%).

Companies were also taking advantage of the high dollar by importing. Almost 80% of exporters were importing, up from 64% in last year's survey.

The survey said the exchange rate was having the biggest impact on exporters, followed by fuel prices and international competition.

ExportNZ executive director Catherine Beard said the DHL survey results were positive and showed the resilience of the export community.

''We've had the global financial crisis, demand challenges and our currency being quite high against our trading partners when historically it's been a lot lower.

"It has been the perfect storm, in some ways, and I think the fact that our export statistics are generally holding up is an indicator of the growing sophistication of our exporters in terms of moving up the value chain and being as productive as they can,'' she said.

The value of New Zealand's total exports rose 5.14% in March, compared with the same month a year earlier, according to Statistics NZ.

In May, the BNZ-BusinessNZ performance in manufacturing index reached a nine-year high level of activity and BNZ economist Doug Steel called it a ''stunning result''. PMI readings did not get much bigger than that, even globally, during better times than prevailed offshore at present, he said.

Dr Clark, also the MP for Dunedin North, said National had ignored the overwhelming evidence of a tipping point in manufacturing and seized on one statistic that was based on early slaughtering of animals because of the drought.

Economic Development Minister Steven Joyce and Prime Minister John Key were skewing the statistics to hide the plight of manufacturers, he said.

''The PMI that Mr Joyce is singing to the rafters about comes off the back of the drought and the Canterbury earthquake. It shows a one-off boost created from misery in our rural heartland. Steven Joyce should not be happy about that.''

The other boost came from construction manufacturers supplying Christchurch. Again it was on the back of human misery, Dr Clark said.

''The truth is, primary is the only sector with the scale necessary to survive what Steven Joyce is doing to the economy. The rest of manufacturing faces a tipping point. There is a new consensus on manufacturing. Sadly, National refuses to be part of it,'' he said.

Mr Shearer continued with his claim that 17,000 manufacturing jobs were lost in the last year. Manufactured exports outside the primary sector were in long-term decline and had fallen by 17% in real terms since 2008, he said.

dene.mackenzie@odt.co.nz

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