Region's export figures buoyant

By YOKE HAR LEE

December export sales by Auckland manufacturers were a third up on a year earlier, and companies expect the robust trend to continue.

The Employers and Manufacturers Association (Northern), says the December export growth followed a 42 per cent rise in November.

Total sales turnover - domestic plus export - rose at an annual rate of 18 per cent in December, after rising 15 per cent in November.

Businesses cite the exchange rate as a major concern and most report they are under pressure to raise prices to help recover the impact of rising raw material costs, says the association's director, Bruce Goldsworthy.

He says premature rises in interest rates could dampen business willingness to invest in new production equipment, because production capacity can quickly be replaced by lower-cost countries in Asia.

In the December business conditions survey, 26 per cent of respondents cited the exchange rate as a key concern, against 32 per cent in November.

"Since the exchange rate registers as the major concern, it seems some sections of the industry need to recover the effects of the low exchange rate's impact on their raw material costs by raising their prices."

The survey also shows that more businesses are expecting to improve their profitability.

Despite the sales gains, capacity utilisation was slightly lower in December, at 84 per cent, against November's level of 90 per cent.

Because of the jump in businesses needing more staff, companies are spending more on training.

"About a quarter of survey respondents want to take on more staff, but they are having trouble finding both skilled and unskilled people to employ.

"Because of that, and their strong sales, they are facing the facts by showing a willingness to spend on training."

Mr Goldsworthy says some 76 per cent of those surveyed in December are saying they will spend on staff training, against 52 per cent in November.