Talking of manufacturing

February 28th, 2014 at 9:00 am by David Farrar

The Press reports:

A new report released by ManufacturingNZ says contrary to popular belief, the New Zealand economy is actually heavy compared with other OECD nations.

And:

Manufacturing contributed 14.6 per cent to the country’s gross domestic product in 2012.

This makes New Zealand one of the more manufacturing- heavy economies of the OECD.

By mid-2013 there were 191,000 jobs in the manufacturing sector.

Average wages are greater than those in the retail, accommodation and food service sectors

Also one manufacturer notes:

Skope managing director Guy Stewart said the company, which manufactured chillers and freezers for the hospitality and restaurant sectors with clients including Coca Cola Amatil, felt support had increased from the National Government compared with the previous Helen Clark-led Labour government.

“Helen saw manufacturing as a twilight industry, and boring and to be ignored. [Manufacturing] survived despite that position.”

I wonder what a living wage of $22.89 will do to manufacturers, as they compete with off shore manufacturers?

The report has some ideas:

Compiled by researcher Castalia, the report notes the Government has support initiatives under way, but says more can be done.

The Government needs to tailor export promotion, increase the supply of skilled workers, and help smaller New Zealand companies during government tendering processes.

They sound good ideas.

New Zealand Manufacturers and Exporters Association chief executive John Walley said he agreed with the conclusion that the Government needed to develop an overarching manufacturing policy particularly for “added value” manufacturing.

Firms like Skope needed to be able to compete from a New Zealand base rather than move overseas, Walley said. A high kiwi versus other currencies was the biggest issue the sector faced, he added.

The Government does not set the exchange rate. We don’t have tens of billions of dollars to spare to try and manipulate the exchange rate to whatever level a lobby group says it should be

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21 Responses to “Talking of manufacturing”

  1. Rick Rowling (815 comments) says:

    B-b-but, I thought the road to riches was us getting all our stuff made in China & Bangaldesh, while we all became web designers and performing artists.

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  2. martinh (1,257 comments) says:

    Still avoiding the biggest issue of the week, the Whittel letter, you a behaviouring quite like a evasive slippery politician now yourself. The fact its being avoided by you two makes me the most concerned that it was indeed an awful money Key deal done that took justice from the families.
    I havent seen Whaleoil post on it either

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  3. Colville (2,298 comments) says:

    I was sitting in a tent at a wedding recently , 6 meters by 6 meters all steel frame really nice product and talking with a couple of chaps who like me have spent a fair bit of time cutting up metal and welding it back together.
    Pricing for the tent goes like this,
    EWS tube 50 mm $38/length x 17 = $646 = COST.
    Catches , bolts and clips = $50,
    Plastic feet = $40
    Machine work, CNC 3D plasma cutter, welding robot and welding consumables = $200
    Powder coating = $100
    Canvas and sewing = $300 (about 50 M2)
    Boxes packaging and printing = $50.
    GST = $208
    Wholesale margin @15% = $208
    Freight = $50
    Retail margin = $246
    So a grand total of $2098

    Price to buy this tent at Mitre 10 Mega ??

    $299.00.

    And that boys and girls is why we cannot compete with china. The pipe is twice the cost of the final product.

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  4. Bovver (173 comments) says:

    You should post this in General debate matinh

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  5. martinh (1,257 comments) says:

    ok i will do thanks Bovver

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  6. srylands (414 comments) says:

    “the Government needed to develop an overarching manufacturing policy particularly for “added value” manufacturing”

    Which in practice would be what exactly?

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  7. mandk (1,015 comments) says:

    It is popularly believed that most of our exports are primary products, but a lot of what we export is processed primary product and is, therefore, manufactured. Meat packing and freezing or chilling is manufacturing. Processing of raw milk is manufacturing.
    Mind you, as John Walley hints, we need to do more to add value to the manufacturing process.

    @ srylands, for a start, how about manufacturing timber products, instead of exporting logs? There must be many other examples.

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  8. Fentex (1,015 comments) says:

    I wonder what a living wage of $22.89 will do to manufacturers, as they compete with off shore manufacturers?

    DPF keeps hammering what appears to be a selected talking point – the foolishness of making a context free promise to implement the ‘Living Wage’ – but in this instance the effort makes it seem some people think a low wage economy is to be admired and preferred to one that can pay better wages.

    The constant harping on the issue begins to look like ridiculing the idea that people ought have the opportunity to be better off.

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  9. srylands (414 comments) says:

    “@ srylands, for a start, how about manufacturing timber products, instead of exporting logs? There must be many other examples.”

    yes how about it? What excactly do you propose the Government to do? Give me an example of a policy that the Government should adopt to increase the export of timber products.

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  10. James Stephenson (2,223 comments) says:

    in this instance the effort makes it seem some people think a low wage economy is to be admired and preferred to one that can pay better wages.

    “Average wages are greater than those in the retail, accommodation and food service sectors”

    ‘Cos like, manufacturing generally requires people with skills who are worth more than minimum wage, but what happens if you distort things by applying a random number some “Reverend” has pulled out of his arse, as a wage to be paid to someone with no such valuable skills?

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  11. srylands (414 comments) says:

    “but in this instance the effort makes it seem some people think a low wage economy is to be admired and preferred to one that can pay better wages.”

    I want an economy that delivers prosperity. That will not be delivered by thinking you can dial up higher living standards by conjuring a Living Wage, or promoting snakeoil such as green jobs.

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  12. gump (1,661 comments) says:

    @dpf

    “I wonder what a living wage of $22.89 will do to manufacturers, as they compete with off shore manufacturers?”

    —————————————-

    Good manufacturing staff generally get paid well above the minimum wage because their skills are essential and valuable to their employers.

    As an example – a pay rate of $22.89 would actually be a massive pay cut for line workers in a meat-works.

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  13. gump (1,661 comments) says:

    @srylands

    “yes how about it? What excactly do you propose the Government to do? Give me an example of a policy that the Government should adopt to increase the export of timber products.”

    ——————————–

    1. Lowering the company tax rate is one example of a policy that would encourage domestic timber processing.

    2. Lowering the ACC levies for workers in timber processing plants is a second example.

    3. Stream-lining the resource consenting process for factory placement and expansion is a third example.

    How many more examples do you need?

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  14. Psycho Milt (2,419 comments) says:

    I wonder what a living wage of $22.89 will do to manufacturers, as they compete with off shore manufacturers?

    Why do you wonder about something that exists only in your propaganda fantasy world? Oh, wait – I answered my own question.

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  15. Ben Dover (526 comments) says:

    Get with the program

    Hulme won the 1967 F1 in the Aus Made Repco Brabham

    Hulme’s father one the VC in crete

    http://youtu.be/XNfq310iOTI

    Get Your Self a Hulme SuperCar

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  16. Ben Dover (526 comments) says:

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  17. Ben Dover (526 comments) says:

    Owen Sub Machine Gun

    Could of and should have saved 20,000 Australian lives

    The story behind the Owen is incredible but typical of the Patronising ANTI Manufacturing Attitudes in this part of the World

    Though ugly as Sin this weapon was referred to as “The Diggers Darling”

    even when it is “Done Better here” they try and shut it down

    in harsh field trials the Owen outperformed the Sten and Thompson

    Owen was a Genius well ahead of his time

    http://en.wikipedia.org/wiki/Owen_Gun

    Why it is relevant is that manufacturing and defence are linked

    and both are being run into the ground except this time more lives are at stake

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  18. Ben Dover (526 comments) says:

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  19. Ben Dover (526 comments) says:

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  20. Ben Dover (526 comments) says:

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  21. Ben Dover (526 comments) says:

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