Written By: lprent - Date published: 2:10 pm, June 12th, 2014 - 115 comments
Categories: blogs, christchurch earthquake, David Farrar, Economy, employment, manufacturing - Tags: 9th floor, hypocrisy, kiwiblog, sewer
David Farrar in his usual burst of hypocrisy and curious selectiveness about detailed numbers is proclaiming a headline rise in manufacturing. As is usual he is only interested in the top level numbers and doesn’t provide a link to even the summary data. I guess that is because they are rather depressing for employment and wage packets, which is what most voters expect from growth. But here is the view from the 9th floor of the beehive.
Seasonally adjusted manufacturing value for the 1st quarter of 2014 was $25.3 billion. A year ago in the same quarter it was $22.8 billion. That’s an 11% increase in the last year.
This of course is what Labour, Mana, Greens and NZ First call a manufacturing crisis.
Ah no. What they call a manufacturing crisis is that there are few or no jobs arising from this miraculous rise in manufacturing. Consider this from the March 2014 Household Employment Survey
The main contributors to the annual growth in employment were the construction industry (up
24,400 people – 14 percent) and the professional, scientific, technical, administration, and
support service industry group (up 17,700 people – 7 percent).
Although not statistically significant, there was also a rise in the retail trade, accommodation, and
food services industry group (up 17,100 people – 4.9 percent)
Manufacturing? I had to dig into the spreadsheets for that. It is in table 7 of the Household Employment Survey spreadsheet. The estimated employment in manufacturing declined from 246.2 thousand in March 2013 to 246.0 thousand.
So somehow we managed to have a 11% increase in manufacturing over the past year with no increase in employment in manufacturing jobs. Curiously David with his view coming from high in the Prime Ministers office failed to mention that. I wonder why? Could it have something to do with Labour, Mana, Greens and NZ First being completely correct (and David Farrar being a selective paid mouthpiece for National)?
Where the jobs are going to is the one-off Christchurch rebuild. Much of the growth in jobs in fact comes from Canterbury construction and the services servicing them.
The increase in Canterbury employment included an 11,900 (36 percent) rise in the construction
industry and an 11,900 (26 percent) rise in the retail trade, and accommodation and food
services industry group.
As usual most of the remainder comes from Auckland where we have a housing crisis and burgeoning ICT export industry.
Just shows what happens when you hold up working on peoples houses and businesses until the year prior to an election. Of course this was probably had nothing to do with Brownlee’s dithering for the past 3 years eh?
But lets have a look at the manufacturing information that David (curiously) did not provide from the more detailed PDF. What the government would like voters to see is this.
What they don’t want voters to see is what the manufacturing looks like without the dairy and meat in the following graph. That is because there are bugger all jobs in processing dairy (the rise in sales of meat is negligible), most of the processing is done in highly capital intensive plants.
Doesn’t that more like what voters are seeing when they look at our jobless manufacturing “recovery”. I’d point out that when you dig further into the stats, you’ll find that even the upturn in this non-dairy and meat “manufacturing” sales, a large chunk of it also turns out to also be in barely processed commodities like petroleum and coal products, non-metallic mineral products, other food products like fruit or cereals, and wood. Each of which, like most farm products, is subject to prices that rapidly change on the world market, which competitor nations can and do rapidly emulate and follow, and which are frequently subject to changes in the ability to enter markets like recent restrictions of milk powder into China. Most of the processing for which is increasingly done by machines rather than people because that is what is demanded by the market.
Even the dairy growth is faltering on the back of sustained drops in dairy prices and the buildup of stockpiles of dairy and meat products. The StatsNZ commentary says about dairy and meat that…
The volume of finished goods stocks (which is not seasonally adjusted) was 6.7 percent higher than in the March 2013 quarter, and is now at the highest-ever level for a March quarter.
This is reflected in the year to year stockpiles where there are more than 1.5 BILLION dollars in stock hanging around of dairy and meat.
Ah yes, rapidly heading for a local glut and probably job layoffs in what processing jobs there are in the dairy industry would be my bet.
So as you can see, there is a reason that David Farrar doesn’t like to provide links to the StatsNZ documents. While the commentary in them tends to only concentrate on the positives for the government, the information is there for everyone to see. Even those dumbarses who comment at the Kiwiblog sewer. We have a jobless recovery going on where almost all of the profits are going to a select few (including many government MPs) who own the sectors of the economy that the the government chooses to foster – their donors.