Export gap worries manufacturers

CHRISTCHURCH - Continuing slow growth in export sales is worrying the Canterbury Manufacturers' Association, despite booming domestic demand.

Results of the association's latest survey of its members show manufacturers had jobs for 4 per cent more workers in December 1999 than in December 1998.

Total sales for December were up 13 per cent on a year earlier, while one in four respondents were making better profits.

But association chief executive John Walley said the gap between growth in domestic demand and that from overseas buyers was a real worry.

In December, export sales rose by 4 per cent year-on-year while domestic sales rose by 19 per cent.

"For three months now, our respondents have reported only modest increases in export sales," Mr Walley said.

"In the past three months, between a third and half of the respondents each month have had lower export sales than in the same month a year earlier.

"It's a clear concern, but knowing why it's happening is anyone's guess. Despite such favourable conditions for exports - the low dollar and growth in the economies of almost all our trading nations - we are not seeing greater growth in manufacturing exports. Things really should be a lot stronger in the export sector."

Mr Walley said government planners should not think the current growth cycle allowed greater state spending. "Loose spending will only result in greater tightening of monetary conditions," he said, "and that'll choke off the recovery."

- NZPA