Manufacturing Matters- Tuesday Top-Up 3

Recent key developments in MAKE│NZ

• We sometimes forget how much confusion still is out there about who we actually are, and where we come from. That lack of clarity is no surprise, given that we’ve been sailing under three different flags just in the last decade. So, over the next few weeks, we’ll take you on a tour of our history, starting today at the very beginning:

• The above ad appeared in the Lyttelton Times on July 9, 1879. A report on the meeting in the same paper on July 10 mentioned, among others, that
“The Chairman, after reading the advertisement, spoke of the difficulties men in the coach building business had to contend with in competing against England and America with their advanced machinery. He said that about 100 buggies had been imported into Christchurch lately, bearing a very light duty. Out of these some sixty had been sold at prices which he and other coachbuilders could not manufacture them at, the result being that a large number of men who were either out of work or on half-time, would have been fully employed if these had been made here.”
And further a proposal
“That a Committee be formed to see if it is desirable to call a public meeting to take into consideration the necessity of petitioning the Government to put on a protective duty where required”.

Thus, what was to become known as the Canterbury Manufacturers’ Association [CMA] was founded almost a century and a half ago on a call to introduce a tariff to protect domestic manufacturing. Very old-fashioned in these days of global free trade – or is it? In its FACT SHEET: Biden-⁠Harris Administration’s Progress Creating a Future Made in America of July 24, 2024, The White House refers to its Executive Order of January 25, 2021, on Ensuring the Future Is Made in All of America by All of America’s Workers and refers to a number of measures undertaken by the Biden-Harris government to restrict the importation of manufactured goods. There are no indications that under a President Harris that approach would change – not to mention her opponent in November’s election.

• Our LinkedIn Group is off to a good start, today we’ll be rolling out our first Manufacturing Industry Conference clip from EMEX this year, so make sure to join if you haven’t already!

• We’re still on the hunt for more feedback about how we can best shape this community, so don’t forget to fill in our quick survey here

• Our most recent meeting of the Transparent Factory Working Group last week, hosted by Hamilton Jet, painted a picture that we’ve seen in several other sites where the group met previously: It is really hard to find a software package, or a combination of packages, that performs well in the key functions of a Networked Manufacturing (Industry 4.0) IT system (Enterprise resource planning, manufacturing planning and scheduling, monitoring / controlling machinery and equipment, etc.).

Recent key developments in New Zealand

• Two weeks ago, we talked about concerns around reliable and affordable energy supplies in the medium- to long term. As it turns out, we don’t need to look that far ahead to worry. Here’s a really good update on where we are at right now: https://youtu.be/VFzm7XjaGpg – and if you haven’t got the time to watch it, here’s a summary in a nutshell from John Kidd, Head of Research at Enerlytica:
“What we’ve got is not working” …
To illustrate, the graph below shows prices for electricity futures for the past 9 months, currently sitting at just under $400. The wholesale spot price at mid-day Monday, July 29th, was between $713 and $898, depending on which part of the country you’re

• To compare, Australian electricity futures in NSW and VIC are ranging from AUD 57 to AUD140, depending on location and period bid for.
• Manufacturers who had the foresight to strike long-term fixed-price variable-volume contracts a couple of years ago will probably feel quite lucky right now.

Tell us how the current energy price hikes affect your manufacturing operation in the comments below!

Recent key developments in the World

• What’s hot, and what’s not, in capital goods manufacturing globally? Here’s a good summary, based on a survey of 386 publicly listed manufacturing companies around the world (Source: Roland Berger Winners Capital Goods 2024)

EPC means Engineering, Procurement and Construction; The Flow Control sector is benefitting heavily from global energy transition programmes

• And here is a series of graphs showing trends in manufacturing in the US over the past five years:

Obviously, the uplift in US manufacturing post-COVID has occurred both in the consumer goods, and in the capital goods sector. It will be interesting to see whether the quite sharp dip in the latter recently will be just a blip, or a sign of things to come. The recent growth in Defense Capital Goods should not come as a surprise and is unlikely to be a mere blip

• Where and how is wealth created? There are many ways to analyse and present information to answer that question, here is an interesting one:

• The graph above shows median per-capita income in territorial authority areas in Germany. We see the usual picture, high incomes in centres of commercial activity like Hamburg, Frankfurt, and Munich. But then we see dark red spots in places that are otherwise quite small: Wolfsburg (127,000 inhabitants), Erlangen (120,000), and Ingolstadt (142,000) – all smaller than Hamilton (185,000). The explanation: These three cities are the headquarters and biggest manufacturing sites globally of VW, Siemens, and Audi, respectively. Ingolstadt (Audi) actually has the highest per-capita income in all of Germany
• Another interesting feature of the map above: The line that delineates the largest contiguous area with the lowest incomes (lightest shading; right-hand side) is exactly the former boundary between East- and West Germany
• I couldn’t find a correspondingly comprehensive map to show where the centres of wealth creation are in New Zealand – here’s the closest I came across, based on Infometrics data:

To compare, the per-capita income in Ingolstadt is around $124,500.