Manufacturers remain bullish

WELLINGTON - Manufacturing is recovering, according to the Manufacturers Federation after the results of the latest WestpacTrust Manufacturers Business Opinion survey. For the first time since the survey started in late 1994, business confidence in the sector has been positive for three quarters in a row - December through to June.

Simon Carlaw, chief executive of the Manufacturers Federation, said that even though confidence had slipped from a record high of a net 48 percent (the excess of optimists over pessimists) in the March quarter to a net 35 percent in the June quarter, that reflected more realistic expectations of manufacturers.

"Overall, the sector is markedly confident about the future," Mr Carlaw said.

Cost pressures had continued to decline and a net 10 percent of manufacturers had reported increased output.

A net 40 percent of manufacturers expected output to increase over the September quarter. For exporters, particularly small exporters, a significant factor had been the fall in the exchange rate against the Australian dollar back to levels last seen in 1993.

Export growth had bounced back in the June quarter to the same level as September 1998 with a net 17 percent of manufacturers reporting increased exports.

For the first time since March 1995 small exporters with 100 or fewer staff had reported a net 8 percent increase in exports.

While growth had been solid, the domestic recovery had been weaker than expected. A net 11 percent of firms reporting increased sales.