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Inconvenient indeed

Written By: - Date published: 7:17 am, June 15th, 2013 - 62 comments
Categories: class war, jobs - Tags:

Your favourite smug, self-aggrandising Tory and mine, David Farrar, wrote a post yesterday about something called the “Performance of Manufacturing Index”, which is a wee survey that the BNZ does. Apparently, it shows manufacturing on the grow. ‘How inconvenient’ for people worried about the crisis in manufacturing, Farrar chortled. Then, Blenheim’s largest manufacturer laid off 84 workers.

Yeah, laugh all you want, Farrar. And point to all the dumb arse employer surveys you want.

Here’s the truth – 40,000 jobs gone in manufacturing in five years, including 6,000 in the last year (in case you think there’s a recovery happening). Now, another 84 highly-skilled workers out of well paying jobs, which will send an economic and social shockwave throughout their community.

But what the fuck do Farrar and the Right care? As long as they get rich off government dodgy contracts and property speculation, and the dollar stays high so their luxury imports and overseas holidays are cheap, what do they care? Well, they’ll care when even the St Johnny’s tarnished halo can’t keep National in the mid-40s any more.

62 comments on “Inconvenient indeed”

  1. Lanthanide 1

    Yeah, my thoughts around that was whether this survey is always on the same businesses from survey to survey, or whether they completely change out the group selected each time, etc. Because the “best results in 9 years” can easily be sheeted home to the sampling. I’m sure DPF probably knows that, being it’s his job and all.

  2. Descendant Of Sssmith 2

    You can’t survey a business that has closed.

    I guess it’s entirely possible that for some they have short-term gains from the closure of others.

    Medium and long term it’s shite for the industry.

    A raw product, low wage, income disparate, low skilled, broke government future moves ever closer.

    Nothing is truer than those mocked up posters saying “national a blighted future”. We’re seeing it in action day after day after day.

    • Eddie 2.1

      and that’s the biggest point against the PMI – you can’t survey a business that’s closed. In fact, a closure might boost the average result of the survey because, if that business was participating before, it was probably reporting intentions to fire staff , low orders etc

      • Rob 2.1.1

        Yeah , I mean what do employers have to do with manufacturing anyway. Especially when you have true ground up manufacturing expertise and leadership from the likes of winston , Russell and shearer .

  3. karol 3

    Then there was this article a couple of days ago.

    A run of weaker manufacturing data, which snapped a 15-month streak of gains yesterday, is likely to cast a pall over the country’s economic growth as the effects of the drought come home to roost.

    Sales volumes of manufactured goods fell 0.6 per cent in the March quarter, according to data released by Statistics NZ, with the volatile metals category dragging the headline number lower with a decline of 6.2 per cent.

    The drop in metals was due to poor aluminium sales volumes, which fell 13 per cent compared to the December quarter, as the Tiwai aluminium smelter battled with low international demand and the high New Zealand dollar.

    That was offset by a solid performance from the meat and dairy sector in the quarter, with sales volumes up 0.5 per cent. Overall, the picture was a very mixed affair, with seven of the 13 manufacturing industries gaining in the March 2013 quarter, while six fell.

    ANZ senior economist Mark Smith attributed the primary industry gain to farmers bringing their animals to slaughter sooner than usual because of the drought, with meat sales volumes making up for reduced dairy production in the period.

    Stripping the boost from the primary manufacturing sector from yesterday’s figures, and the total sales volumes declined 0.8 per cent.

    Westpac senior economist Michael Gordon was slightly more bearish, saying the weaker manufacturing figures threatened the bank’s March GDP forecast of 0.8 per cent.

    “We expect that the greatest impact will instead fall in the June quarter, with milk production still down and meat production having been pulled forward,” he said.

    Economists expect the soft run to be limited to some extent by ongoing construction activity in Christchurch and Auckland.

    “Lifting construction sector activity will become an increasingly important source of support, but the fickle global scene, the high New Zealand dollar remain headwinds for the manufacturing sector,” Smith said.

    • Rob 3.1

      So Karol , after 15 months of gains , you focus upon on 1 lower result, and you think it is a crises . Has anyone here actually ever been involved in a manufacturing organisation , because it does not read like it. In fact it reads like a whole raft of arm chair supposed experts and teachers talking it down , well I suppose that is the glorious left .

      • Colonial Viper 3.1.1

        15 months of gains! LOL

        Yeah if you count gains in cow shit pumped to create milk exports, you are correct, Rob. I guess that makes you a cow shit expert.

        • Rob 3.1.1.1

          I would like to claim it , but I would feel like a fraud with the real cow shit experts.

  4. tc 4

    This is also what Luxon was given the CEO role for. Norriss and Fyfe did the obvious reorganisation and fleet clean up whilst price gouging domestic and otherpractices kept margins healthy.

    Now Luxon will slash his way through the areas nice guy Fyfe has left, staff and work practices is the ‘low hanging fruit’ that nationals screwed over econimic recovery now place next in the queue.

  5. TheContrarian 5

    “Your favourite smug, self-aggrandising Tory…”

    Replace Tory with ‘moderator’ and I would have thought you meant LPrent.

    [RL: The man works incredibly hard to make this site work for everyone. Including you. While you are always free to express an argument or engage in discussion … flat out disrespect like this just pisses me off.]

  6. sanctimonious 6

    Disrespect-what a tosser.

  7. deemac 7

    ah, Farrar, the guy who thought it appropriate to turn up to a British High Commission do celebrating the “best of British” as Jimmy Savile… classy!

    • felix 7.1

      Allow me to answer on Farrar’s behalf:

      * don’t be so precious
      * offense is taken not given
      * can’t you handle a joke
      * it’s just a costume I didn’t actually molest anyone
      * i’m not responsible for your feelings

      * just don’t call me a greedy closeted slurring fascist dwarf lest your lack of politeness signal the end of fucking civilisation itself.

  8. tsmithfield 8

    As I said in the previous discussion here on this subject, unemployment is not a valid indicator for the prosperity of the manufacturing sector for a number of reasons. For instance, companies may find more effective ways of doing things with less people. In this instance, improved performance in manufacturing will be directly correlated with increasing unemployment. In fact, as the GFC unfolded in the US, it was well publicised that firms were improving their bottom line through reduction in staff costs.

    So, I don’t respect the arguments put forward here that cite increases in unemployment as evidence of a crisis in manufacturing when in fact it might show the exact opposite.

    • felix 8.1

      As long as the machines are happy.

      • tsmithfield 8.1.1

        Whatever. The proposition put forward on this site is that there is a crisis in manufacturing.

        However there is no crisis. “Crisis” can be defined as An unstable condition, as in political, social, or economic affairs, involving an impending abrupt or decisive change.

        By this definition there is no crisis in manufacturing. The changes we are seeing in the manufacture of non-edible products are part of a long term trend of outsourcing to cheaper economies. However, that slack has been more than taken up by food products such as dairy, wine etc. Expect the long term decline in locally manufactured non-edible goods to continue. It isn’t surprising and is a trend that wise businesses would factor into their planning model.

        • felix 8.1.1.1

          Exactly.

          Leave people out of your calculations and there’s no problem.

        • lprent 8.1.1.2

          When you can point to an increased value in 20xx dollars of manufacturing sales or production value over time, then that may be a valid argument. However all of the figures I have seen have shown a long term fall. So your argument has nothing to do with the post. Did you fail to read the post AGAIN?

          Productivity and profit gains can come from many reasons, many of which indicate an unhealthy business. For instance; running down r&d, not trying to grow sales, deferring or cancelling expansion plans, running down inventory levels, and stopping capital improvements are just as common as laying off less productive staff – and frequently are the cause.

          All of these typically improve productivity and profits in the short term as they reduce the costs of growing a business. All of them also presage a manufacturing business that will grow less in the future. Bearing in mind the lack of signs of r&d, market expansions, or capital improvements I think that we are seeing manufacturing necrosis.

          It is unsurprising that Farrar doesn’t understand this. I don’t think he has ever been around manufacturing or any *productive* enterprise in his life.

        • Draco T Bastard 8.1.1.3

          However, that slack has been more than taken up by food products such as dairy, wine etc.

          Except that the food sector isn’t employing those people either.

        • Descendant Of Sssmith 8.1.1.4

          Firstly:

          By that definition tis need a crisis.

          Stability would by definition require that manufacturing jobs remain about the same.

          You then posit that the change to outsourcing, etc is likely to continue and should be factored in i.e. it is a decisive directional move.

          Secondly: no doubt you can support your contention tha job losses are due to increased investment in machinery and efficiency gains. I can’t recall a single announcement about job losses that refer to such gains.

          I can recall plenty that refer to lost contracts, moving production offshore, lack of sales due to the high dollar, government buying Chinese trains, ec

          The meat industry is an example of where there have actually been announcements of efficiency gains due to improved plant = loss of jobs but don’t hear much of this in relation to manufacturing.

          One benefit of the high dollar is that some companies may have purchased and upgraded plant from overseas but they would only be doing tha if they were certain of being able to sell their products.

    • Arfamo 8.2

      The crisis is not in manufacturing per se – I’m sure there are manufacturing businesses doing very well, having reduced their staff. The crisis is in the manufacturing sector’s inability to provide the same level of decently paid jobs that it used to, and this government’s inability to develop & implement policies that replace those lost “good” jobs with others. Jobs are what are needed by the majority of the working age population. Jobs that produce something.

      • Populuxe1 8.2.1

        Yep. Though it is far from clear which sectors can provide those jobs. If we knew that, doubtless we would know what training to invest in.

    • Eddie 8.3

      how do explain the fall in manufactured exports, fall in manufacturing as a share of the economy (and god knows its not because the rest of the economy is booming!)

  9. Yes 9

    I was listening to radio live yesterday when they were interviewing I think the union leader. Correct losing 84 jobs not good and he said the dollar and the lack of NZ air force work lead to the demise.

    Garner rightly pointed out that the dollar had dropped and asked how much the NZ dollar should be at. This guy said 60 cents. Omg you could hear a pin drop in the studio. Do unions not know what the impact would be if the NZ dollar was 60 cents on the economy would be. 60 cents to save 84 jobs is crazy. Exports would be good but imports would sky rocket leading to massive costs increases. 60 cents would actually make the rich richer. 75 cents is where the dollar should sit.

    And the loss of air force work…hmmm who killed the air force in NZ. Yours truly Labour … How much maintenance can you do on a dozen sky hawks sitting on trade me.

    Also if Russell understood economics and know the dollar goes up and down ..his 3.5 billion dollar printing press has just cost the economy and taxpayers billions.

    • felix 9.1

      “60 cents to save 84 jobs is crazy. “

      40 THOUSAND jobs, dickhead.

      • infused 9.1.1

        And probably make hundreds of thousands suffer.

        • lprent 9.1.1.1

          You mean like our younger generations who will have to pay back the excess National generated debt? Like I had to do for the last 30 years since that fuckwit National government of Muldoon?

          John Key seems to like following his irresponsible footsteps

          • Green machine UpandComer 9.1.1.1.1

            It always makes me ‘chortle’ as it is said above, whenever a Labour supporter, or a Green supporter, has something to say about debt. How you don’t keel over from cognitive dissonance is beyond me.

            • Lanthanide 9.1.1.1.1.1

              “How you don’t keel over from cognitive dissonance is beyond me.”

              I guess it’s because you don’t really know the definition of cognitive disnonance.

              Fact: Labour between 1999 and 2008 got us to a net 0 government debt position by paying back debt and refusing tax cuts that the right kept jumping up and down about every chance they got.

              Fact: National cutting taxes as they did in 2009-2010 as drastically increased government debt, pretty much undoing all of Labour’s good work.

              National is the party of debt and reckless spending (in this case, mainly tax cuts), not Labour.

            • lprent 9.1.1.1.1.2

              How you don’t keel over from cognitive dissonance is beyond me.

              Because I know what I’m talking about and you clearly do not? Perhaps you haven’t caught up with the reality of the debt situation over the last two decades. http://en.wikipedia.org/wiki/Economy_of_New_Zealand

              If you went back to the late 70’s and early 80’s you’d have seen the same reckless wastage by another National government.

              Always nice to squash another idiot with more interest in myths than reality.

              • Jimmie

                It is kinda funny lprent about you grizzling about the Nats borrowing over the last few years to soften the affect of the GFC and the Christchurch earthquake when through 2008-09 every leftie around was harping on that John Key should have been printing $$ and borrowing hand over fist to ‘stimulate’ the economy.

                Also between 2008-13 every effort of the government to minimise and reduce wastage and low quality spending has been screamed at by lefties as killing the economy and public sector.

                And don’t harp on about the tax cuts causing the rise in debt – there is no way that the government lost $30 billion in lost tax revenue over the last 5 years from the reduction in income tax rates.

                It’s simply that the political left in general are more one eyed than Cantabrians and can’t admit that the child eating (in their eyes) Key has actually muddled his way through the GFC quite effectively and this is shown by his continued high poll ratings.

                Key is the Nat’s biggest asset to win next year. The left tried to win in 2008 and 2011 by saying that Key couldn’t be trusted but the voters thought otherwise. Gotta try a different tactic come 2014 especially if the economy continues to grow over the next year.

                Otherwise the left as a whole is just not going to be relevant at all.

                (PS. Get rid of Shearer please – he is an embarrassment)

                • Colonial Viper

                  Key is the Nat’s biggest asset to win next year.

                  Haha!

                • Descendant Of Sssmith

                  There aren’t efforts to reduce wastage – just efforts to transfer expenditure to the private sector.

                  Have you not read the reports on the massively increased cost of consultants, the building of roads that were not justified on normal roading assessment parameters, the massive increase in funding for Prime Ministerial services, the increasing dishing out of millions of dollars to failing private schools, the costs associated with trying to get a national MP elected to an International position.

                  And you call the left blinkered.

                  • Descendant Of Sssmith

                    Forgot about the 1billion to bail out SCF that was unnecessary as well.

                    I think pointing out that Key was not to be trusted was simply an observation not an election strategy and that voting for key = trusting him.

                • jcuknz

                  Nicely put Jimmie … why I will continue to vote for him in preference to the current Labour Mob. He will muddle along better than the LM

            • xtasy 9.1.1.1.1.3

              Dark Machine UpandDowner:

              If you would have any clues about import and export business, you would have shut your words here up long ago:

              http://www.allbusiness.com/economy-economic-indicators/money-currencies-interest/15051093-1.html

              Heard anything about “hedging”, as much as I hate it, and as much it may still make sense, and they all do it, even the government, to protect from volatile currency fluctuations?

              You are as smart as a smart ass without the “smart” at the front, dear mate.

              Get a life, do economics 101, read up on Keynes, Friedman, Krugman and others, and get back once you have seen the light, thanks!

      • Yes 9.1.2

        There not 40000 lost!!!! Even rusell conceded that this week….Monday announcement wii read…cliche cliche cliche

        • felix 9.1.2.1

          How many is it, Yes? Just the 84?

          Because if it’s not just the 84, and you knew it, then you knew you were lying when you wrote the comment above.

        • Pasupial 9.1.2.2

          @ Yes (9.1.2)

          “Monday announcement wii read”: You get your news from a games console? That actually explains quite a lot…

          BTW (re: comment 9): “75 cents is where the dollar should sit”. Why that particular exchange rate? Just because it’s a nice round number?? Please show working.

    • lprent 9.2

      Perhaps you haven’t figured out that the 60-65 cents range was common over the last 20 years and that imports don’t exactly earn us any income…

      As it is a high dollar makes it harder to sell overseas, therefore reduces jobs, therefore reduces the number of people to buy imports. It also means that we wind up with extra debt paying for increased numbers of people not working and less overall business profits to tax.

      This may be a basic concept of the country paying our way that you are just too thick to follow. Certainly seems like it reading the crap you are famed for…

    • Paul 9.3

      I just don’t get the logic of your arguments.
      Blaming Labour for some of their neo-liberal policies which damaged NZ’s economy is not a reason to support National’s neo-liberal policies which damage the economy.
      Have you the width of vision to see outside petty party politics?
      Can you not see that the economic experiment imposed on the world in the 1980s has been a catastrophe for the vast majority of people and a disaster for the environment?
      This is much much bigger than Labour National.
      They both are supporters of the present economic system.

    • Poission 9.4

      .his 3.5 billion dollar printing press has just cost the economy and taxpayers billions.

      farm debt has increased by 15b$ since the start of the GFC(2007) ie 31,777-46,785 B$ of which around 10% is in improvements and the remainder in increased bank debt for land capture or an increase in lending bank printing presses of 13.5 b$.

    • Eddie 9.5

      um, 60 US cents to the dollar is the long-term average exchange rate.

    • xtasy 9.6

      Yes: You are an idiot! Do not bring in the exchange issue, as trade deals, being purchases or sales, are done for periods, and for fixed times. Usually currency fluctuations are accounted for, in advance. So it is a risk area, and that is what both parties accept. Now any deals usually are pre-determined for months ahead. While you point out the NZ Dollar just dropped against the US, the Euro and so recently, that does not affect most deals done some short time ago.

      You really have no clue of trade and business, stop pretending that you do, you are a lost cause here, take a break and inhale some fresh air and get some sunshine, to improve your vitamin intake and metabolism, perhaps.

    • ghostwhowalksnz 9.7

      Once it was around 50 cents US . Your point is ?

      • jcuknz 9.7.1

        I remember when it was 42c and the pound at around 26c .. really do not follow the arguments becuase this is a world wide problem with advances in technology putting people out of work and the only solution I can see is a reduction of the number of people. A long term solution which can only be accomplished by a reduction in the birthrate.

  10. RedBaronCV 10

    Why the focus on just “high value” manufacturing. Like it or not we consume boring items such as soap and toothpaste etc and many of these can now no doubt made in fairly sophisticated plants.

    A tour of the local grocery store shows a good number of basic products made in Australia with it’s higher wages, unions etc or other countries with similar labour force policies. Nor do I buy the economies of scale arguments – if it’s reasonably automated then smaller production units are likely to be just as viable. Larger scale production also has to be traded off against distribution costs which are tied to oil prices and hence increasing.

    If the manufacturing is in low wage countries are they using cheap labour and clapped out machinery which won’t go on for ever?. Besides if you are investing in expensive plant doesn’t it make sense to domicile it in an enviroment that is reasonably stable politically. What if your cheap labour country has a coup? Look at Fonterra, it lost a large plant and investment in China over San Lu, and some other company lost a huge hotel to an offshore “partner”.

    You have to pay an awful lot of low wages to offset these sorts of capital loss – perhaps Fonterra should have looked at shipping chinese milk here to turn it into milk powder?

    • Colonial Viper 10.1

      Import substitution

    • Draco T Bastard 10.2

      Why the focus on just “high value” manufacturing. Like it or not we consume boring items such as soap and toothpaste etc and many of these can now no doubt made in fairly sophisticated plants.

      http://www.healthbasics.co.nz/

      Great stuff. Far cheaper than the average bar of soap.

      Nor do I buy the economies of scale arguments – if it’s reasonably automated then smaller production units are likely to be just as viable.

      That, amazingly enough, is what tsmithfield is trying to say. The bit that he fails to get is that such automation results in increased poverty in this country unless those people go into other work which is similar (if it’s not similar then it’s going to have to be training). That other work isn’t happening due to our high dollar meaning that even the global market isn’t enough to soak up our surplus. Throw in the fact that any other country can and will do the same and we’re stuck as a declining export country and, under the present capitalist system, increasing poverty.

      If the manufacturing is in low wage countries are they using cheap labour and clapped out machinery which won’t go on for ever?

      I think you’ll find that a lot of those low wage countries are getting the latest and greatest machinery actually. That said, I did see a video on China that showed an assembly line where actual people were putting components on circuit boards. Something that a machine could have done better and cheaper still. It’s not what you’d see in the factories that make Apples latest iPod.

    • xtasy 10.3

      Heh, strange that, so much of that used to be made here – in NZ, wow, what has happened???

      Global corporate expansion, diversification, outsourcing, off-shoring, and more, so the slaves in low wage countries make tooth paste we need, and more, but NZers sell logs, milk powder, shell fish, raw fish and Chinese made tikis for tourists and importers overseas. Great achievement, a booming ecomony for some, but not for most. Fuck this shit, get a life and declare war, that is economic an social self determining war, of sorts!

      • Pasupial 10.3.1

        @ Xtasy

        I understand your anger; really, I do. The other week, over on The Daily Blog, I posted this comment (to Trotter’s; “What if we’re Wrong?” post):

        “The fate of all empires is disintegration, and as most recently demonstrated in Afghanistan: Just because you can’t win, doesn’t mean you should stop fighting.”

        But by the next day found myself having to retract this declaration of war:

        “Non-violence requires no less courage. I think of the WWI conscientious objectors; crucified and hung out to die in no man’s land, would I have that level of determination? Resistance is the key, that persistant refusal to acquiesce even when utterly outmatched. Or as the film says:

        “You can’t win, but there are alternatives to fighting.”
        – See more at: http://thedailyblog.co.nz/2013/06/07/what-if-were-wrong/#sthash.4zE9i382.dpuf

  11. Rogue Trooper 11

    this upturn in manufacturing PMI is primarily to service Construction sector and the Christchurch rebuild.

    apparently approx. half of the items on Aussie supermarket shelves are ‘own / in-house’ brands, a trend that is apparent locally, down the aisles. Frekk, there is a lot of sh*t food in the supermarkets in general, although, you seem fair David.

  12. xtasy 12

    Come on, Eddie, I give T.S. credit, where it is deserved, but on this one you are not quite sincere:

    Click to access April-2013-PMI.pdf

    In detail it may not be quite as great as the government tries to make out, but honestly there is increased performance. The question is in what areas, and whether it is in all areas (which is not the case), and whether it is improving value added manufacturing (it is in part).

    So party lines go against this, I know, but this is again a “success” that is likely not so much of the government’s making, but a “resilient” Mainland China and a few other trading partners, who actually, with quantitative easing and other measures, keep themselves above waters, to continue importing NZ products. And for the Chinese, they love baby formula and milk powder from here, same as logs and raw fish, so they can produce value added products from that to make more sellable products out of it for their markets.

    New Zealand continues to be a “dumb economy”, and it should be Labour and Greens attacking that, that this useless lot just sells off more raw materials and little value added stuff, and thus sinks us down the economic comparison ladder at OECD stage.

    At least NZ First got the message, but that is another story, eh?!

  13. xtasy 13

    No, never give in, never give up, Guantanamera, viva

    The supposed “free market” is a compromised system, and that means we can compromise it any time, to be fairer, more humane and just any time!

    There have always been m,anagement controls and incentives, all over the “capitalist” world, to make a damned system work, that did not really work. So get a life, we need healthy economic management, same as the EU, NAFTA, US, Canada, Latin America, most of Asia, Africa and so on. They fool us to believe that NZ is the only “free” economy and trading on supposedly “equal terms”. You have to be a nutter to believe NZ is “equal” to Mainland China, the US, NAFTA and the EU, and think we are “free” to negotiate. NZ governments are criminals, that is the ones of the last 2 decades. They must be sacked and locked up to pay for treason, nothing less.

  14. Thank you for this article.

    e.

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