0 Manufacturing still in crisis. Yeah right.

Remember the "manufactured" manufacturing crisis? Labour, the Greens, Winston First and Mana spend tens of thousands of taxpayer dollars conducting a sham "parliamentary inquiry". The "inquiry" reached a predetermined conclusion.

There's just one slight problem; manufacturing wasn't actually in crisis at all. Manufacturing has now been in positive territory for almost 18 consecutive months. 

And Statistics NZ's latest figures paint an optimistic picture:

Economic Survey of Manufacturing: March 2014 quarter  –  Media Release

The total manufacturing sales volume rose for the third consecutive quarter, Statistics New Zealand said today.
After adjusting for seasonal effects, the volume of total manufacturing sales rose 0.5 percent in the March 2014 quarter, led by rises in chemical and petroleum related industries.
"This quarter's rise occurred despite a relatively flat quarter for meat and dairy product manufacturing," business indicators manager Neil Kelly said.
Meat and dairy product manufacturing was up just 0.1 percent following a large rise in the December 2013 quarter.
"Rises in the chemical and petroleum industries more than offset falls in a number of the other industries," Mr Kelly said.
The sales volume for total manufacturing, excluding meat and dairy, was up 0.7 percent in the March 2014 quarter. While overall sales increased, sales for seven of the 12 manufacturing industries in this group fell.
The main industry movements were:

• chemical, polymer, and rubber product manufacturing, up 8.5 percent
• petroleum and coal product manufacturing, up 5.8 percent.

The trend for the total manufacturing sales volume, which gives a longer-term picture of movements, is rising – following a low point in the June 2013 quarter. 
In current prices, the total manufacturing sales value rose 0.6 percent ($155 million).

The significant feature of today's figures is that even though meat and dairy exports were pretty much static, volumes for the March quarter continue to rise. An increase in sales volumes for the quarter of $155 million is very welcome indeed. At the same time, our terms of trade are the most favourable they have been in two generations.

Instead of talking down the manufacturing sector and seeing crises where none exist, the opposition parties should be welcoming today's announcement with an admission that they got it wrong. Manufacturing did dip in the early stages of the Global Financial Crisis, but those manufacturers and exporters who got smart and changed the way the did business are now flourishing as New Zealand leads the world towards economic recovery. 

That is something to be celebrated, not bad-mouthed.

0 Still more good news

Labour, the Greens and Winston First have tried to talk up a "housing crisis". Yes; house prices in Auckland have risen, and yes, there are issues of supply in both Auckland and Christchurch, although to be fair, Mother Nature cops much of the blame for the latter.

But a "crisis"? Probably not. Anyway, as tends to happen whenever the opposition parties declare anything to be a "crisis", the problem referred to takes care of itself. Manufacturing has been in positive territory for almost two years now, exports are at record levels, our terms of trade are at a level not seen since 1973, and now the building industry is going gangbusters; check this out:

Auckland and Christchurch's rapid house-building resurgence has surprised and delighted economists as it hit the highest level since 2002.
NZIER principal economist Shamubeel Eaqub said a strong recovery was coming through in the construction sector, in part a rebound from the pause at the end of 2013, mainly due to timing of some large government projects.
"The pace of new house building is picking up strongly, as well as a surge in alterations and additions, which covers quite a bit of the repairs in Canterbury," Eaqub said.
"Non-residential work picked up strong this quarter. The big drivers are the education, accommodation and commercial [sectors].
"Accommodation is mostly in Canterbury. Quite a bit of the work in both education and commercial sectors are likely to be driven by earthquake strengthening."

"Ah yes" you say. "It's all because of the Canterbury rebuild.". Well actually, not it's not; read on:

Regionally, good momentum was building up in Auckland and Canterbury but the recovery is also broadening across regions.

"The evidence to date is of a solid recovery, which is gaining in momentum," Eaqub said.

As we mentioned last week, we have a friend in Wanganui who operates a business supplying the building trade. Their business has been run of its feet all year as the local construction sector has ramped up. And people they talk to around the country report similar stories.

Even Statistics NZ is noticing the upturn:

Statistics New Zealand said residential building work grew a seasonally adjusted 15 per cent in the three months to March 31, the biggest quarterly increase since September 2002, accelerating from a 2.3 per cent rise in the December quarter. The value of residential building work grew 17 per cent to $2.36 billion in the period, its eighth quarterly gain.
The volume of non-residential work grew 17 per cent in the first three months of the year, from a fall of 2 per cent in the December quarter, and the value climbed 18 per cent to $1.4 billion.
The rise in building activity coincides with growing issuance of new consents with the country's two biggest cities, Auckland and Christchurch.
Local authorities issued residential building consents worth $2.29 billion and non-residential permits worth $1.19 billion in the March quarter.

It's especially pleasing to see Christchurch getting back on track with building consents after the Government appointed Doug Martin as Crown manager last year. 

The Christchurch City Council has reapplied for IANZ accreditation, and Nick Smith is not ruling out keeping Mr Martin in place until the Council is 100% compliant in meetings its consenting targets. But this is one bottleneck that has been sorted out.

Are there any more crises that the opposition parties want sorted?

0 Back home to more good news

We've had a wonderful holiday. We're back in New Zealand now, and there will be a few bills to pay after SWMBO's attempts to revitalise the South Australian retail sector!

But we're delighted to see that the tide of good news shows no signs of turning. No; we're not referring to nice Mr Cunliffe's latest gaffe, although those are becoming a bit of a habit. We're referring to the latest piece of good news from Statistics NZ; this time it's export earnings:

The seasonally adjusted value of exported goods rose 2.1 percent to $13.6 billion in the March 2014 quarter, Statistics New Zealand said today. This follows rises in the previous two quarters.
“Meat and fruit led the increase in seasonally adjusted exports,” international statistics manager Jason Attewell said. “This is the second consecutive quarter that both values and quantities for these two commodities have risen.”
Seasonally adjusted meat values rose 8.7 percent in the March quarter, and quantities rose 6.8 percent. Fruit values rose 27 percent, and quantities rose 20 percent.
The rise in meat and fruit was offset slightly by a fall in milk powder, butter, and cheese, down 2.4 percent. The fall in dairy follows 26 percent increases in both the September and December 2013 quarters. Despite the small fall this quarter, dairy remains at high levels and is the leading contributor (31 percent) to total exports.
Imports rose 1.5 percent to $12.5 billion in the March 2014 quarter. The increase was led by a rise in capital goods.
The seasonally adjusted trade balance for the March 2014 quarter was a surplus of $1.1 billion. This follows a surplus of $986 million in the December 2013 quarter. 

A trade surplus in excess of $1 billion is fantastic news for New Zealand. In trade terms, we are paying our way in the world.

But wait; there's more. A couple of significant records have been set; read on:

Monthly exports pass $5 billion for the first time
Exports rose $671 million in the March month, to $5.1 billion. Milk powder, butter, and cheese led the rise in exports, up $474 million (45 percent) compared with March 2013.
“This is the first time monthly exports have exceeded $5 billion, and annual exports have exceeded $50 billion,” Mr Attewell said. “Record dairy exports pushed the values past these thresholds.”

This is really good news for New Zealand exporters, especially when the opposition parties continue to push the line that the export sector is in crisis. Patently, it isn't.

The continuing flow of excellent economic indicators suggests that the economy is in pretty good shape, with just over 19 weeks to go until the General Election. Why would any voter with any common sense put New Zealand's economic recovery at risk just for the sake of "one big new tool", or whatever Labour and the Greens are rolling out this week.