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National’s mouthpiece on manufacturing doesn’t like details

Written By: - Date published: 2:10 pm, June 12th, 2014 - 115 comments
Categories: blogs, christchurch earthquake, David Farrar, Economy, employment, manufacturing - Tags: , , ,

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.

115 comments on “National’s mouthpiece on manufacturing doesn’t like details”

  1. geoff 1

    Excellent analysis, Lynn and once more showing Farrar up to be National’s toadie.

    • lprent 1.1

      Oh that was just a hook that I added in there after reading his hook post on mickey this morning.

      Damn stupid really. Lawyers do what their clients tell them and they can’t release what their advice was to them. Makes them an easy target for someone wanting to be a bit of an arsehole. I don’t mind using the same tactic…

      It really isn’t what this post is about – more of an afterthought after I’d looked at the current quarters data yesterday.

  2. ianmac 2

    Sadly though as interested as I am it is so hard to get a basic (simplistic?) understanding of the employment/production problems. Need simple catch words to try and shift the thinking of right leaning friends.

    In the first graph it has taken 6 long years for Manufacturing sales to creep back towards the highs of 2009. What were they doing in the interim!

    In the second graph we have huge stocks of unsold goods waiting for a free market buyer. 1.5 billion dollars worth of goods unsold for heaven’s sake! What sort of planning and support is going on or not going on there? Is the Government asleep at the wheel?

    • lprent 2.1

      And most of that graphs increase merely reflects the increases in dairy prices with a lesser increase in dairy volumes.

      Unfortunately I’m not good at slogans… sigh

      Perhaps people could suggest a few.

  3. The Real Matthew 3

    Who would have thought a technology based industry would shed jobs as technology became cheaper than employing wage earning individuals?

    Next they’ll have pre-pay at the pump and you’ll be buying your train ticket at a machine.

    • Colonial Viper 3.1

      We’re creating an economy which doesn’t need the majority of workers any more, while at the same time refusing to let people make a living in the field of arts, crafts, culture and literature.

      Speculators and financial scammers get rewarded the most in this environment.

      • Wreckingball 3.1.1

        I should have directed this reply directly at you CP.

        Also, Colonial Viper – “We’re creating an economy which doesn’t need the majority of workers any more, while at the same time refusing to let people make a living in the field of arts, crafts, culture and literature.”

        We are not refusing to make let people make a living in the field of arts and crafts etc. We have numerous authors and artists who make a great living. If people are skilled enough, and produce good products, then they can make a living. What do you propose? We subsidise people so that they can sit around making pottery. Very backward thinking. Please explain.

        • Colonial Viper 3.1.1.1

          Firstly, it is crucial to accept that society requires a major not-for-profit arts and culture emphasis in order to de-prioritise the role of commercialisation and corporations in society.

          Secondly, it is crucial to accept that you cannot just have a few outstanding people making a “great living” from the arts – you need to nourish and support talent at every stage, and even give ordinary people in depth exposure to art and literature. This means funding scholarships, night classes, entry level jobs in the field, worthwhile career pathways, etc.

          Thirdly, it is important that as a society we put significant monies into teaching people who are interested skills like pottery, weaving, painting, writing, theatre, film making, CGI and dance.

          Very backward thinking. Please explain.

          Why on earth do you declare it backwards? Advanced civilisations need to maintain creativity and culture within their peoples, and that is what I am suggesting.

          • Jum 3.1.1.1.1

            Well said CV; when you want to produce robots you remove stimulus that excites parts of the brain that encourage humanity.

    • lprent 3.2

      Would that it was so. But most of the “manufacturing” growth is for simple conversion of barely processed commodities mostly using existing plant – even in the dairy sector.

      There is another set of data around (in several places statsNZ, MOBiE, and tax) that looks at capital investments that I neither had the time or the space to expound on. But once you exclude dairy then what you can see is very little investment in any kind of plant. In fact it looks like most “manufacturing” plant is being run down.

  4. Ad 4

    This still doesn’t feel like a recovery no matter what the banking economists say.

    It’s worth going into the tabbed sections of the statistics report that LPrent has linked to. In there you will find five-year series breakdowns for each of the manufacturing sectors.

    They do not make pretty reading if we are seeking a value-added export base for New Zealand.

    • Seafood processing in slow decline
    • Transport and machinery equipment in slow decline
    • Fruit, oils and cereals declining
    • Petroleum spiking around 2012 and still up pretty strongly
    • Chemicals and polymers gradually up, and also strong

    There is I am sure an industry story to be told in each one of those sectors.

    This morning Auckland Council determined to give the superyacht manufacturing proposal in Hobsonville a 1-year reprieve from turning the whole thing into housing. And sure, we need more housing and Council could have sold it off to pay down debt. Sigh.

    With neither central nor local government even imagining economic development in New Zealand, without a change of government we will continue to be the devleoping world’s bulk protein exporter. We need to be better than that. Where is Jim Anderton when you need him?

    • lprent 4.1

      Yeah I find it a bit terrifying for the future when I look at how shallow and vulnerable that National’s economic development strategy is.

      It is classic short-term rentier thinking about how to make money for property owners cheaply. Bearing in mind the whacking great debt that they foisted on us giving tax cuts to the wealthy and the greying of the workforce, it is a bloody silly idea foisting a crippled economy on to the kids to pay for it.

      • Draco T Bastard 4.1.1

        Yeah I find it a bit terrifying for the future when I look at how shallow and vulnerable that National’s economic development strategy is.

        I didn’t realise that they had one.

        it is a bloody silly idea foisting a crippled economy on to the kids to pay for it.

        National’s been doing that forever. It’s certainly the full idea behind Muldoon’s junking of Labour’s retirement savings plan back in ’75/6.

    • greywarbler 4.2

      Jim Anderton is amongst other things trying to recreate Christchurch cathedral. A bunch of the stolid Christchurch community can’t move into the 21st century and Anderton has saved historic buildings in the past. So he wants to recreate the past triumph in Chch.

      • Ron 4.2.1

        Interesting that Anderton a Roman Catholic I believe did not show much interest in preserving the Catholic Blessed Sacrament Cathedral in Christchurch instead spends all his time attacking Anglican Authorities who want to move on with their own building.

        Jim Anderton is amongst other things trying to recreate Christchurch cathedral

  5. ghostwhowalksnz 5

    Looks like Farragoblog and the Oily Orca had the same burst of inspiration of the state of manufacturing

    F: The manufactured crisis gets worse.-June 11

    W:LABOUR’S MANUFACTURING CRISIS JUST KEEPS CRISISING ALONG- June 10

    Notice the same ‘angle’ on both reports, a pun on Labours ‘manufacturing crisis’

    Coincidence ?

    Or you get what you pay for .

    • ianmac 5.1

      They must be getting bothered that the people are aware of job shortages?

    • Tom Gould 5.2

      You get what you pay for. Plus a few of the big chattering chooks thrown in. Cheap at the price.

  6. infused 6

    You will find the manufacturing sector is actually now recovering and paying debt from the GFC.

    • lprent 6.1

      Correct. But most of that was over in 2013.

      The problem is that most of manufacturing aren’t growing. That shows up in the lack of capital and jobs going into anything outside of dairy. This is a time when we should be seeing new companies starting up and heading off to export as well as the survivors from the mid-00s that are expanding. They simply aren’t there.

      It isn’t too hard to look around and see the signs of more GFC style recessions in the next decade. What do we want? Go into more debt as the population ages? That appears to be Nationals strategic direction.

      • infused 6.1.1

        Nope. I look after quite a number, so I can tell you what’s actually going on.

        Most only recovered around December last year.

        The biggest thing is, simple manufacturing is dead. They need to adapt and change. A few of them are, and making good money off it. I can’t really go in to detail on what they are doing though, but it’s moving away from the traditional manufacturing process (knowledge based). The reason is other countries do it far cheaper, and that’s something that’s not going to change. People bleat on about quality etc all the time. But at the end of the day, it comes down to the dollar. Every time.

        The cost of shipping from NZ is also massive. There are only a few companies that handle bulk/heavy freighting around the world direct from NZ, and they charge out the ass for it.

        What do you expect the Govt to do? There are already a ton of tech based export programs going on in Wellington, which I am involved in. I think the problem is, not a lot of this is common knowledge.

        • Draco T Bastard 6.1.1.1

          The reason is other countries do it far cheaper, and that’s something that’s not going to change.

          Actually, they don’t as it’s physically impossible for them to do so. It’s only our financial system that makes it seem as if they do. Basically, our financial system is delusional.

          The cost of shipping from NZ is also massive.

          The reverse must also be true.

          • lprent 6.1.1.1.1

            It is, but less so for quantity. The shipping companies prefer not to come into NZ lightly laden. They prefer to have something to offload.

          • KJT 6.1.1.1.2

            Not really. Lots of bulky heavy stuff from NZ.

            The stuff coming in is light, high tech. Plenty of space inbound.

            Removing New Zealand ships, and crews, did not result in the promised decreased costs for exporters, because the ships going to Europe/China/USA via Australia (our biggest manufactured export market) are already full of milk powder, meat, fruit, timber and coal.

            The overseas shipping companies act as a cartel, to keep prices high both ways, however.

            • Colonial Viper 6.1.1.1.2.1

              This despite what I hear is shit loads of spare freight shipping capacity internationally right now…

        • lprent 6.1.1.2

          Most only recovered around December last year.

          Yeah most that I know of who took a hit from the GFC financing issues were getting ahead in the second half.

          The biggest thing is, simple manufacturing is dead. They need to adapt and change. A few of them are, and making good money off it.

          The cost of shipping from NZ is also massive. There are only a few companies that handle bulk/heavy freighting around the world direct from NZ, and they charge out the ass for it.

          Agreed, but there are four types of manufacturing that survive.
          1. Tech exporters where the competitive advantage is software. NZ is too damn small a market so they typically export 90%+ (obviously I know them well)
          2. The ones where freighting to NZ is prohibitive – for instance the foam rubber stuff my sister was running
          3. The ones using a local resource and adding lots of value to it mostly for export. The small ones of those usually aren’t getting the support that they could use. That is where a number of manufacturers I know of now work.
          4. The bespoke manufacturers who support the others. They get no support and the support that they mostly need is introductions.

          There are already a ton of tech based export programs going on in Wellington, which I am involved in. I think the problem is, not a lot of this is common knowledge.

          First problem is in what you described. How much manufacturing is done in the wellington area? They shouldn’t be based there at all. Put them into Auckland, Christchurch, and some roving ones who poke their noses into the provincial centres (like Wellington :) )

          Another problem is that most of the support is targeted at the wrong targets, mostly the larger companies who really don’t need it except when they do a transition to a new product area. The small to medium ones don’t receive much at all.

          And another one is that the support is passive. Instead of the government going out and helping the SME’s to get it, they wait until people come to them. Which just lends itself to crony capitalism. It becomes who you know and/or lobby rather than being proactive and pushing ideas into companies (makes me irritated and thinking of the 1980s). If you are a SME exporter, then you need people actively coming to talk to you inside the companies with possibilities rather than trying to find time to get to largely meaningless meetings where there is little active and accurate details.

          Now you have to remember that I don’t have a particular stake in this. I write software and there usually isn’t that much of an issue finding work. I prefer companies related to manufacturing exports. But that preference is pretty much ideological. It employs a wider range of people. It certainly isn’t the best paid. But I’ve done a lot of exported software as a service as well in the past.

  7. Naki man 7

    “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.”

    This is complete bollocks, job layoffs my arse, Fonterra Waitoa has just employed 100 new staff in its new 120 $mil UHT milk plant. A friend of mine who is an engineer for a company that is designing some of the many new milk powder driers being built in the north island over the next two years says he is very busy. The truth is there will be more jobs in the highly paid dairy industry not job layoffs. As for a local glut this is also horse shit.

    • lprent 7.1

      Well if they were going to lay off staff, then they wouldn’t do it in a new plant right?

      Stupid comment.

      • Naki man 7.1.1

        Yours is the stupid comment suggesting that there will be fewer jobs when there are lots of new plants being built. Fonterra and the other companies will be employing more staff. There is huge growth in the dairy industry even in the north island. Every year milk volumes increase and it has to be processed.

        • Colonial Viper 7.1.1.1

          Bulk commodity manufacture

          Wish NZ could do something which required a bit more product innovation than tonne after tonne of milk powder

        • lprent 7.1.1.2

          Problem is that there is currently a mountain of unsold stock being created, presumably because the amount that is already being produced isn’t wanted in the market. Part of that is because plant and milk production in other countries is rising. The growth in the US for whole milk drying is phenomenal. Not to mention parts of Europe and China itself.

          So adding new plant in, if that trend persists, will eventually cause the fraction of the total milk production that is covered by the world market price falls (as we are seeing now), and closures of older plant. It isn’t like we haven’t seen this same pattern before in NZ.

          Personally I think that Fonterra and the other exporters have gotten myopically focused on China and haven’t started to think about what happens when that market stops taking all available production.

        • redfred 7.1.1.3

          Back Nack Man

          Again your stupidity astounds me.. do you understand how competition and markets work?
          Basically if there is a buck to made people pile into it and then it becomes a competition of scale and efficiency.

          Read this … NZ will be over taken in approximately 5 years as the biggest milk powder producer.

          http://keithwoodford.wordpress.com/2013/10/10/the-industrialisation-of-american-dairying-and-the-implications-for-new-zealand/

          What facts have you got?… none, some meaning less local job figures that have nothing to do with the bigger picture.

          Here is some more facts

          There were 60,000 dairy suppliers in the US and their milk supply was about four times the volume of New Zealand’s.

          “But 40 per cent of that milk is produced by 800 mega dairies.”

          http://www.stuff.co.nz/business/farming/dairy/10037881/Kiwis-warned-off-mega-dairy-farming-model

          NZ Dairy won’t disappear but by the end of the decade it will not be the cash cow it once was… yes pun intended.

          These truths show how short sighted National are in pinning there hopes on dairy.

          What do you make of that information; does it worry you Naki Man? Can you comprehend how it makes what Key et al are doing on par with Muldoons wool stock piling? Do see how it makes a complete lie out of David Farrars spin for his beloved National party or are you just blinkered to the facts?

    • Draco T Bastard 7.2

      The truth is there will be more jobs in the highly paid dairy industry not job layoffs.

      So highly paid in fact farmers have been getting in trouble for breaking minimum wage laws.

  8. dimebag russell 8

    neighhhhhhhhh!

    [lprent: Horse imitations should probably be in OpenMike? They do seem rather pointless here. Perhaps you meant to say that you couldn’t understand numbers and couldn’t say anything? Silence may be a wiser policy. ]

  9. Gosman 9

    Do you have any evidence that David Farrar is a paid mouthpiece for National? Because if he was he constantly wanders off message.

    Regardless why are members of the left hung Up On Manufacturing jobs? Surely what industry someone works in is less important than total employment and wage growth in the economy as a whole.

    [lprent: Now considered to be a diversion comment. Moved to the current time. ]

    • Colonial Viper 9.1

      It’s vital that NZ be a nation of production, and not just a nation of consumption, Gossie. And in that light, high value, elaborately transformed knowledge goods are what pays premium.

      I thought you would know this?

      As for your questioning of the longstanding Farrar/National link – LOL

    • lprent 9.2

      Do you have any evidence that David Farrar is a paid mouthpiece for National?

      I have enough that I am confident enough to state it. If he chose to take it up legally, then I know what I’d be looking for on a discovery motion. Not that I expect him to do so.

      Besides, if it is good enough for him to make similar statements about people here including me from 2007 onwards with absolutely no evidence, then I can’t help but feel that I am merely following his lead.

      I’d also note that I don’t consider that this is what this post is about. People are welcome to address that topic in OpenMike.

      Surely what industry someone works in is less important than total employment and wage growth in the economy as a whole.

      The rebuild in ChCh (as I pointed in the post) isn’t exactly a good basis for allowing growth in the internal economy. Outside of a bit of highly overdue construction in Auckland, the only sectors of the economy that appear to be growing permanent jobs are in Auckland.

      The dairy industry certainly isn’t as can be readily seen in the slow depopulation and lack of jobs of regions switching over to it after they finish their conversions. That damn stockpiling of the (presumably mostly ) dairy products is starting to worry the hell out of me because it is signalling a good solid bust.

      Manufacturing jobs are by far the best permanent way to soak up unemployment. Sure we are exposed to the rest of the world and have to sell to the rest of the world. At present this government is not trying to encourage that. You only have to look at the near complete drop in the support offered by MFAT or R&D funds to that sector except for a favoured few companies.

      At present the jobs being created are completely fragile and appear to be largely dependent on construction mostly in the rebuild of ChCh. Any disruption to construction jobs with the typical boom bust of that industry will have significiant carry over effects to a number of the other sectors of the economy that have been showing employment (eg the massive services rise in Canterbury).

      These are the factors showing up in the persistently well below projections income, business and GST tax take that shows no signs of stopping. The last budget was pretty much a fantasy in terms of showing any signs of being able to either pay off National’s debt or the prepare for the greying of the population. That is bloody worrying

      So yes. It does matter that manufacturing employers have been unwilling to do more than just survive over the last 5 years. We won’t have a good solid recovery that will sustain downstream employment until they do.

      • Gosman 9.2.1

        If you don’t want to be quizzed about your claims about David Farrar ‘ s formal links to the National party when you are attempting to make another point (in this case about the benefits of manufacturing jobs) you may want to refrain from making the comments in the first place. People such as geoff below obviously see this post as making that link even though you have stated it was not your main intention of the post.

        [lprent: It is my opinion backed by facts I know. He had a go at an author here today on a post directed at Labour, so he got one back in exactly the same style. If you are actually interested in that facet, then use OpenMike. Raise this again here and I will ban you until after the election. Clear? ]

    • Draco T Bastard 9.3

      Surely what industry someone works in is less important than total employment and wage growth in the economy as a whole.

      Nope:

      The books most sobering fact ‘Samsung produces 3/4 of our GDP with 123,000 employees’

      The type of industry counts for a hell of a lot and farming really doesn’t cut it.

      • lprent 9.3.1

        The books most sobering fact ‘Samsung produces 3/4 of our GDP with 123,000 employees’

        That is only the direct employees. Tech is always an ecosystem these days. Most tech companies have between 2 and 10x the number of direct employees coming in as associated supply companies, contractors, and other assorted supplies of services.

  10. Wreckingball 10

    What do you guys propose we do? Make sure that manufacturers employ people to do the jobs that machines can do. Shall we bring in handpumps into gas stations so that we need an attendant at each fuel pump? New technology in manufacturing naturally leads to a decrease in the number of jobs. But more manufacturing, will at least keep manufacturing jobs constant, if not increase the number.

    Also, Colonial Viper – “We’re creating an economy which doesn’t need the majority of workers any more, while at the same time refusing to let people make a living in the field of arts, crafts, culture and literature.”

    We are not refusing to make let people make a living in the field of arts and crafts etc. We have numerous authors and artists who make a great living. If people are skilled enough, and produce good products, then they can make a living. What do you propose? We subsidise people so that they can sit around making pottery. Very backward thinking.

    • JG 10.1

      Completely agree. It’s productivity growth, which should be celebrated. A lot of creative destruction embedded in those numbers too.

    • lprent 10.2

      Make sure that manufacturers employ people to do the jobs that machines can do.

      That would be valid if there were stats showing capital investment going into manufacturing. They don’t (look it up).

      Besides, what do petrol pumps in gas stations have to do with manufacturing? That is a retail industry not manufacturing.

      I’d also point out as a matter of general disclosure that I spent several years writing code for a local company that manufactured equipment for petrol stations. Not much of a market here. Most of it was exported. The company has since been sold to a overseas company.

      • Wreckingball 10.2.1

        1) capital investment is on the rise – take a look at the numbers. The main thing that will impact capital investment is if the government tries to decide what industries New Zealand should invest in. The market will determine what industries offer the best returns. Stupid ideas such as a green bank that invest in green technologies are useless. The market will invest in green tech if they think there are returns to be made.

        2) that petrol pump example was a broad example of a human doing what a machine can do. I am sure there are mechanical pumps used in manufacturing that could be replaced with humans.

        3) example of petrol pump equipment manufacturer is great. Kiwi ingenuity and then selling it to an overseas company. A great story. Nothing wrong with selling to someone overseas. That business owner has reaped what he has sowed. He can now reinvest that money as he wishes.

        • lprent 10.2.1.1

          capital investment is on the rise – take a look at the numbers.

          In manufacturing? That is a stupid lie. I may have to dig the figures out that I looked at in the December quarter and write a post if this is what the idiot brigade have as one of their current delusions. When I looked at it then, it was dismally low when compared to the capital cost invested. Depreciation was almost an order of magnitude higher.

          I am sure there are mechanical pumps used in manufacturing that could be replaced with humans.

          Why would you waste a human on doing something like that? They are both far too expensive in any modernish society (ie since the early 19th century).

          Nothing wrong with selling to someone overseas.

          In this case unlikely. They were all at or close to retirement. Most likely property.

          Much of their product range was shut down. I know the product I was working on was because it directly competed with a product that the buying company had just spent 20-30x our cost in R&D to produce.

          BTW: You sound like another mindless randian theoretician rather than someone with any idea about what you are talking about.

        • Draco T Bastard 10.2.1.2

          The market will determine what industries offer the best returns.

          Only in NZ. Everywhere else the government is stepping in and supporting chosen industry and succeeding. It’s pretty much how the so-called First World Nations started. It’s why we have computers to read this blog on (The Entrepreneurial State, Mariana Mazzucato). If it had been left to the “free-market” we’d still be back in the 19th century.

          Stupid ideas such as a green bank that invest in green technologies are useless.

          Green investment banks work bloody well and green technologies are what’s going to make us sustainable. The only stupidity that I can see is you.

          The market will invest in green tech if they think there are returns to be made.

          Profits are actually a thing of the past – we can no longer afford them as we can no longer go with the growth that supports them.

          Nothing wrong with selling to someone overseas.

          It’s a loss to the country that makes us poorer so, yes, there is something wrong with selling to someone overseas.

  11. dimebag russell 11

    Ban him now!

    [lprent: At this point I’m more likely to ban you for being stupid on my post. ]

  12. dimebag russell 12

    calm down lprent. I’m on your side. I cant help it if these sad sorry people drive me bananas.

    • greywarbler 12.1

      Help he’s being repressed! Now you can see the violence inherent in the system! (Monty Python) I think that the election might be made into a sharp satirical satire by someone clever. There must be lots of content if the right eye looked.

      Dave Armstrong doesn’t have any more Down the List on Sunday mornings. Perhaps he would be able to turn out some choice pieces on our version of political skulduggery which isn’t dug out but twisted with a tractor-driven auger. They were probably showing them at Mystery Creek, which might explain why our politics is such a mystery to us all.

      (Please complain if you miss Down the List to Radionz if you miss it – satire is like gold in NZ.)

    • lprent 12.2

      So add a point to your comments. Makes it a whole lot more useful and readable.

      When I’m moderating I look at comments against the policy and the past history of the commentator. If you don’t have a past history of contributing to the debate or trying to do so, then I will apply the poker

      • You_Fool 12.2.1

        My thought is that Dimebag is a night wing whinger posing as a left wing poster in the hope of making the left look like idiots…

  13. greywarbler 13

    Perhaps assiduous in manufacturing fibs and chimeras. And who can tell what they are?

  14. dimebag russell 14

    my past history is a worker who built bridges, planted forests, manicured the vistas of the rich, took out their garbage and generally tried to dodge the malice in blunderland. Lighten up lprent. this is war and while you might have some pretensions to be an honourable gentleman these people are vicious and need to be taken down at every peg. Trying to pretend that there is some sort of code of behaviour and pandering to the enemy is not the way to drive these scum out of office.

    • greywarbler 14.1

      Trouble is dimebag – because it is so serious it is necessary to marshall facts, make arguments and advance in the general direction of a reasoned political system. Which is why too many simple comments with no point aren’t useful. It’s not news to us that it is war. I bring some music videos sometimes, but they usually have a point to illustrate which I hope that people appreciate.

      So what do you think about manufacturing, can we compete if we can get the speculators filthy hands out of our pockets. Can we glide out from low wages to trending up while at the same time allow the exchange rate to go down, which makes imports dearer. Higher prices for imported stuff, then on more NZ manufactured stuff, will eventually balance out with more jobs, each one creating a ripple effect.

      • dimebag russell 14.1.1

        take you point gw but when some tory expostulates “horseshit” then what is there to say. I could have punned it and just said nay! however going round in circles is not my bag. cutting the gordian knot is. the thing is the situation is more dire than the polemicists realise. three weeks ago or thereabouts Rod Oram opined in the SST that New Zealand is slowly regressing into an agrarian economy similar to 1932 before the first Labour government was elected and began a programme of import substitution. This is now an historical event that is rapidly fading from memory as the pacific rim countries have assumed total superiority in manufacturing consumer goods. There may be 100 more jobs at Waitoa and other milk processing facilities but that is like trying to put out a fire with a water pistol but the upshot is that as manufacturing recedes into the memory then the job of ensuring a decent livlelihood and conditions for those employed and those to come is much harder as the tories maximise their position. I wish I had some concrete things to say about the future besides quoting a whole lot of statisticians numbers about growth but in the meantime it is necessary to expose the the thugs who use their economic power to gain psychological satisfaction beating up on those who cant fight back.
        OK?

        • greywarbler 14.1.1.1

          Dimebag russell
          I looked for the Red Oram piece you quoted and found such a lot of items from him that are totally current even though written last year or so. We definitely have to keep reading and thinking about the points he raises. Put your links in if you can because I get a lot of my information from reading the factual intelligent stuff that others place links to here.

          Rod Oram opined in the SST that New Zealand is slowly regressing into an agrarian economy similar to 1932 before the first Labour government was elected and began a programme of import substitution.

      • Gosman 14.1.2

        You are essentially arguing for lower wages to enable our exporting industries to compete. Seems like you’re not too different to the nasty Tories in that regard.

  15. john 15

    It is lunacy to look towards manufacturing as a big future solution to jobs.

    Globally, manufacturing is dieing sector. As a percentage of GDP it has virtually halved in recent decades – see

    http://motorcitytimes.com/mct/2013/06/paul-krugmans-model-economy-millions-trudging-to-their-factory-jobs-lunch-boxe-in-tow/worldmfg-2/

    Even with billions in government subsidies, not even Australia can afford to manufacture cars.

    The story at top gives figures of 246,000 working in manufacturing – that’s only around 10% of the workforce. It used to be nearly 30%.

    In 1980, a medium car cost $30,000. That’s over $100,000 in today’s money. Yet today we can still buy a medium car for $30,000, because it only takes a fraction of the workers to make it. It used to take hundreds of man hours to build a car – now it can be done in less than 30.

    Manufacturing is an important sector, but as a percentage of both jobs and gdp, it will continue to decline not just in NZ, but globally.

    Anybody who is looking to manufacturing significantly increase employment, in a country that is more isolated from the main markets than any other country on the globe, hasn’t taken their head out of the sand long enough to look at the big picture.

    • Colonial Viper 15.1

      1) We can’t just be a nation of consumers, we also have to be a nation of producers.

      2) Manufacturing creates skilled, well paid jobs for the working class. That’s a worthy goal and one worth fighting for.

      3) We have to prepare import substitution capabilities to prepare for the closing days of globalisation when NZ will have to be more self sufficient.

      4) Kiwis can innovate, design and make better stuff than the rest of the world.

      • john 15.1.1

        I agree we need to do what we can, but it’s lala land thinking that manufacturing will have a bigger percentage of jobs or gdp in ten years time (or even the same percentage as now).

        Meanwhile there’s shortage of an estimated 50,000 workers in I.T. in NZ.

        And we’re going to need another 50,000 workers in primary industries.

        http://www.ruralnewsgroup.co.nz/rural-news/trending/50000-more-workers-needed

        So why do people ALWAYS look to manufacturing – a sector that’s been declining globally for half a century – as the golden goose?

        • Colonial Viper 15.1.1.1

          1) Manufacturing is not declining globally – people are buying as much stuff as ever. Of course the issue is China, and other low cost manufacturers, whom corporates have outsourced our work to.

          2) We may need another 50,000 workers in primary industries but we already have 150,000 unemployed. And primary industry revenues per worker, and pay per worker, only ranges from poor to middling.

          3) People look at manufacturing (and these days it has to be about elaborately transformed high tech manufacturing) as the “golden goose” because in the 60’s, 70’s and 80’s it was the route to take to vastly increase a nation’s living standards.

          • john 15.1.1.1.1

            CV says “Manufacturing is not declining globally ”

            As a share of global GPD, it’s been in significant decline for decades See

            http://motorcitytimes.com/mct/2013/06/paul-krugmans-model-economy-millions-trudging-to-their-factory-jobs-lunch-boxe-in-tow/worldmfg-2/

            Even in the 60s, 70, and 80s, it was in decline globally as a percentage of jobs and gdp.

            As I said earlier, it used to take over 300 man hours to manufacture a car. It can now be done in less than 30.

            • Colonial Viper 15.1.1.1.1.1

              Of course its been in decline as a % of GDP – but why is that the measure that is most important?

              A nation cannot just consume; it must produce. Or it will be at the mercy of foreign powers.

              One of the sectors which has had the most massive growth globally is banking and finance – but playing electronic numbers games is never going to be sustainable. The financial sector is a parasite sucking in and hoarding capital from every other sector of the economy.

              • john

                CV asks “Of course its been in decline as a % of GDP – but why is that the measure that is most important?”

                It is important, because –

                • Around 90% of jobs are NOT in manufacturing. This number is growing and has been for 50 years
                • Only around 10% of jobs ARE in manufacturing. This number is declining and has been for 50 years.

                If you want to do something significant with jobs, you look at the sectors that are growing.

                If you don’t want to make much of a difference, you look to a tiny sector that has been in decline for half a century.

                With only 10% of jobs, looking primarily to manufacturing for jobs, would be like having a anti speeding campaign, but only for cars with number plates that end in 7.

                • Colonial Viper

                  john, why are you so afraid of manufacturing?

                  Why are you so afraid of us becoming less dependent on foreign supply?

                  Why do you want to passively sit back and let manufacturing in NZ die?

                  What’s in it for you to be making these arguments?

                • McFlock

                  what a load of shite.

                  one could equally argue that if we want to find 200,000 more jobs for folk, we should concentrate on the sector that has been allowed to stagnate in job numbers while the rest of the economy has thrived.

                  Only an idiot thinks the only solution is to copy the already successful. A smart person takes a look at the poor performers and sees if they can be improved by somesimple mechanism, rather than consigning them to the dustbin of history.

                  It’s as true of managing employees as it is of managing an economy: the real success comes from figuring out how to do something well that others do poorly. Not trying to beat established success stories at their own game.

                  • john

                    McFlock says “Not trying to beat established success stories at their own game.”

                    You just shot down you own argument in flames.

                    Most countries in the world can manufacture more successfully than we can.

                    They are ALL closer to the major markets than we are.

                    Not even our MOST successful manufacturers, like F&P appliances, F&P healthcare, Methven etc, could not survive staying in NZ.

                    Repeat – not even our BEST manufacturers can survive here.

                    Only a fool would look to a tiny sector that is getting smaller and smaller and has been for 50 years, in a country that’s further from the markets than any other, as the golden goose of job creation.

                    Especially when we need 50,000 workers in IT now, and 50,000 in primary industries over the next few years.

                    Take the blinkers off.

                    • Draco T Bastard

                      You’re all missing the essential point: International trade is dying. This is the natural result of all countries learning to do mass manufacturing cheaply and using their own resources. The other point, of course, is that jobs are dying out due to everyone being able to manufacture cheaply and without people. The economics of empire have reached their end.

                      We have to start envisioning our post work society. If we don’t what we’ll have a few very, very rich people and everyone else in poverty and we all know that ends.

                    • McFlock

                      Repeat – not even our BEST manufacturers can survive here.

                      And each of them wanted to stay, but the high dollar fucked us. And the dollar is high because of the RBA and government policy.

                      We manufacture damned well, with a good workforce. We just can’t sell shit even in our own country because this fucking regime makes imports cheaper by virtue of the fact that every time the economy starts to perk up and people get jobs, interest rates are raised as another gift to the banks.

                      We’re basically subsidising finance-sector profits with the jobs of workers.

                • felix

                  Around 90% of jobs are NOT in manufacturing. This number is growing and has been for 50 years
                  Only around 10% of jobs ARE in manufacturing. This number is declining and has been for 50 years.

                  I love it. Like it’s some sort of natural process. :roll:

                  • Draco T Bastard

                    It is a natural process. As productivity increases the percentage of the workforce needed in a sector decreases. The only thing that would keep it high would be exports but even the developing nations are now starting to catch up in industry with the developed nations and as that happens the market we can export to decreases. The end result is very little trade and a lot of people out of work.

        • geoff 15.1.1.2

          Eventually technology will make almost every job redundant. There might be a temporary bubble in I.T or in primary industries but that’s only until they can off shore that work or automate it.

          Why do you think almost every ‘recovery’ in every western economy is being described as a jobless recovery?

          So when there are no jobs left to do, what do you do, John?

          • Bluey 15.1.1.2.1

            Mostly you come and write comments on your blog of choice when there are no jobs.
            Until your savings run out, then who knows. I guess you have to learn how to catch a fish.

            • Colonial Viper 15.1.1.2.1.1

              Too bad your local stream is only good for catching cow shit and fertiliser.

              • Bluey

                That’s true, but I tend to live near the ocean. You give me an idea though to capture the shit and grow mushrooms on the river banks.

              • john

                We can now fish in local streams that in the 70s were black from toxic waster from factories and stunk from the raw sewerage that was pumped into them.

                The Waikato River used to have a fecal count 1000% more fecal matter than it has today.

                Not everything is doom and gloom.

                • Bluey

                  There were some like that downstream of Horotiu in the old Affco days down your way, but mostly you could drink from streams and enjoy it.
                  It is not better now. I have spent three months travelling around NZ recently with a German and she is absolutely horrified at the filth in this country. I felt ashamed. Even the West Coast of the SI, no bird noise except for the keas in Arthurs pass.

          • john 15.1.1.2.2

            But New Zealand’s recovery now has 166,000 new jobs since the recession. (Dec 09 2,152,000 jobs, rising to 2,318,000 in the latest quarter).

            USA now has it’s lowest unemployment since 2008.

            • Colonial Viper 15.1.1.2.2.1

              Now you’re just talking bullshit political talking points. Who is paying you to do this?

              USA now has it’s lowest unemployment since 2008.

              Can you also tell me when the last time the US workforce participation rate was this low?

              • Colonial Viper

                (for those who don’t understand, the US pretends that their unemployment is falling simply by not counting unemployed people. Clever eh. Eg if you are classed as a “discouraged worker” who has given up looking for a job, you fall out of the workforce participation statistics and are not counted as unemployed.

                In fact in the USA, you can have a 1 hr a week job being paid $2.50/hr and not be counted as unemployed.

                Some days if you simply wear a nice shirt, they’ll stop counting you as unemployed)

            • Colonial Viper 15.1.1.2.2.2

              But New Zealand’s recovery now has 166,000 new jobs since the recession. (Dec 09 2,152,000 jobs, rising to 2,318,000 in the latest quarter).

              So…how much has NZ’s population increased by in those 4 years? Did it increase by more than those 166,000 new jobs?

              Edit…oh would you look at that. Appears to me that population growth over the last 4 years is approximately 200,000. That means we’ve actually gone backwards in job numbers, relative to population.

              My friend John, it seems like you weren’t being completely honest in your statistical representations.

              • john

                Jobs have to be created by the economy. Just because one person arrives at Auckland Airport, doesn’t mean there is automatically one job created.

                The other thing you’re getting wrong is only half the population works.

                • Colonial Viper

                  That’s what I’m saying. Our population is growing faster than the number of jobs being created. Does that sound like much of a “recovery” to you? It doesn’t to me. At best the economy is treading water.

                  • john

                    CV says “Our population is growing faster than the number of jobs being created.”

                    Only half the population works. Jobs only need to increase at half the population increase.

                    And they’re growing significantly faster than that.

                    Do you not get tired of ALWAYS trying to find the most extreme negative position on every subject?

                    • One Anonymous Bloke

                      I get tired of reading the same lame groundless bullshit from right wing gimps year after year after year, as though they operate as some kind of Borg, only with less imagination. A grey blancmange of grey blended parrots twittering grey blended dribble.

                      We need better wingnuts.

            • geoff 15.1.1.2.2.3

              You’ve just dodged the main part of my comment, john.
              Looks like you’re only here to play a game, where’s your intellectual honesty?

              I’ll ask again, what do you do when technology makes every job redundant?

              • john

                That will never happen.

                We have more technology doing more work than ever in the history of man.

                And we have more jobs than we’ve ever had before.

                Time to leave this vortex of infinite negativity.

                • geoff

                  Why is that an infinitely negative situation for you, john?

                  Can you not imagine your life without a job?

                  I suppose for some their job helps fill that empty feeling inside and distracts them from that persistent suspicion that they’re not a human at all but rather a very boring robot.

                  Are you a very boring robot, john?

            • Tracey 15.1.1.2.2.4

              How many lost since 2008?

              As for GDP percentages… 28% of GDP is financial services. Nothing to get you a lil nervous about there aye John.

              • john

                Not really.

                For Statistics NZ, the finance sector includes insurance and business services.

                So anything that is not farming, manufacturing, transport, accommodation or government, gets put in business services.

                So the finance sector includes –

                • investment and superannuation
                • vets
                • architects
                • engineers
                • all types of insurance including health insurance
                • every rented commercial building in the country
                • the mortgage on every house in the country.
                • scientists
                • hire companies
                • real estate
                • rental properties
                • accountants
                • software and computer companies
                • management services
                • employment services
                • travel companies
                • cleaning companies
                • agriculture service companies
                • advertising
                • the legal sector
                • and even pest control.
    • miravox 15.2

      “it is lunacy to look towards manufacturing as a big future solution to jobs.”

      Tell that to Germany, if you like

      German Chancellor Angela Merkel was once asked by then-British prime minister Tony Blair what the secret of her country’s impressive success was. She famously replied, “Mr Blair, we still make things.” In Germany, manufacturing still dominates finance, not the other way around, as Germany has continued to emphasize manufacturing and exports over the financial industry.

      • john 15.2.1

        Germany has the advantage of being in the dead centre of a market that’s hundreds of times bigger than ours, and their transport costs are a tiny fraction of ours.

        Even with those advantages we will never compete on, their manufacturing sector has still plummeted from 30% of GDP to around 20%.

        • miravox 15.2.1.1

          Plummeted? Certainly it lost markets in the GFC, but plummeting is a weird word for the 2nd largest exporter of goods in the world. It’s also rebounding in industrial production since the peak of the 2008 GFC.

          http://www.tatsachen-ueber-deutschland.de/en/economy/main-content-06/strong-economic-hub-in-the-global-market.html

          Around one euro in four is earned from exports and more than every fifth job depends directly or indirectly on foreign trade. Having been “export world champion” six times in a row between 2003 and 2008, in 2009, with exports worth US$ 1,121 billion, around one third of the gross national income, Germany was the second biggest exporter of goods worldwide after China (US$ 1,202 billion). Germany’s share of total world trade is around nine percent.

          I agree about the transport problems for NZ – all the more reason to focus on innovation in SMEs to prouduce for a stable internal market, rather than having international corps ripping off our stuff in a race to the bottom.

          • john 15.2.1.1.1

            So when the numbers for manufacturing are proven to have dropped significantly as a portion of Germany’s GDP, you use figures for all exports and pretend that it’s the same and just the manufacturing sector.

            That’s like including dairy, meat, wood, fish, wool, etc, in our export figures to pretend that manufacturing is booming here.

            • Colonial Viper 15.2.1.1.1.1

              John, you’re not interested in building this nation up, just tearing it down, why are you being such a disloyal prick, is it on behalf of the 0.1%?

              • john

                If you want jobs, you can look to sectors like IT that need 50,000 workers NOW, or primary industries who need 50,000 workers over the next few years.

                Manufacturing has been shrinking globally for 50 years. Manufacturing has been sheding jobs globally for 50 years.

                You’d have to be really stupid to think the answer to the employment issues of NZ (pretty much the worst country in the world to set up manufacturing) lie in manufacturing.

                If you really believe that, then give me a call – I’ve got a really good investment in Nigeria that you’ll love

                • Colonial Viper

                  john. Why are you afraid of manufacturing? Why are you so willing to abandon one of our largest export earning sectors?

                  IT doesn’t need another 50,000 workers. Where are the 50,000 job ads, my good man? Sadly, your lies and exaggerations hide a mischievous intent.

                  The answer to NZ’s employment issues is to stop the march toward neoliberalism, to abandon the TPPA, shrink the financial sector, halve the payments going to foreign owners, and to become more self reliant as a nation.

                  Why don’t you understand that john? Why do you believe that it is in your interests to weaken our nation and its independence?

                  I ask you again, and don’t keep running like a coward – why are you being such a disloyal prick? Are you even a New Zealander? If so, why don’t you fight for the 99% instead of for the 0.1%?

            • miravox 15.2.1.1.1.2

              And you provide nothing…

              Did you look at the link? It’s the quote was about the Germany economy’s export of industrial product.

              Maybe a comaractive picture of manufacturing output (not exports) will help. Note the trend – if German manufactuing is a reducing a contributor to GDP, it’s not because manufacturing has ‘plummeted’.

    • Tracey 15.3

      unlike your party/s which look to oil and coal mining. Solid Energy anyone??? Small job numbers in the oil and gas and coal industries…

  16. Bluey 16

    Wow, only half the population works. And the rest does what?

    • john 16.1

      The rest of the population are babies, children, students (around 30% of the population).

      The other 20% are retired people, home makers, and beneficiaries.

      Hence NZ population is 4.5m with 2.3m working.

  17. Bluey 17

    What is the definition of working though?

  18. fdx 18

    I always considered Farrar more of a codpiece than a mouthpiece.

  19. srylands 19

    This obsession with Farrar is worrying. Also of course manufacturing employment will decline – it is a sign of a prosperous and successful economy. Look at Australia.

    On that note, could you please ban me from The Standard permanently? I know I should be able to rely on self-control but my morbid fascination with the stupidity here keeps me coming back. However, I now know it is futile to change the collective mind set here. So for my own good please ban me. If you need an excuse let me know and I can post a bunch of stuff that I know is trivial, but for some reason presses all your buttons. However hopefully that won’t be necessary.

    • Draco T Bastard 19.1

      The problem with your mind is that it’s set in stone and continues to believe the fallacies that it was taught.

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