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Recent key developments in MAKE│NZ
• Our History – Part 3: The period between the mid-1960 and the mid-1980 in some sense were the real heydays of manufacturing in New Zealand, and the CMA.
• Manufacturing had grown significantly after the Second World War – manufacturers employing over 100 workers growing by 43% between 1951 and 1961. At the same time, import restrictions meant that domestic manufacturers pretty much had the market to themselves. Trade unions were strong in those days, and it was ‘a natural thing’ for Canterbury manufacturers to belong to an organisation of their own – the CMA.
The CMA organised its own trade fair …
… and was quite influential politically:
• The issue of exorbitant electricity prices has finally caught the attention of the wider media after we raised it more than two weeks ago and a number of manufacturers announced (temporary) shutdowns, with more to follow. The Manufacturing Alliance – a group of manufacturing industry organisations we were instrumental in setting up six years ago – has had meetings with several Ministers on the issue, including the Minister for Energy, Simeon Brown, and the Minister for Small Business and Manufacturing, Andrew Bayly, with the latter commending us on alerting government and the wider public about how serious the situation is. Unfortunately, and for the short term, there is nothing government can do other than providing subsidies to the companies worst affected
• At our Fireside Chat event last night, the topic was Artificial Intelligence [AI], with a focus on what opportunities this software tool provides for manufacturers to ‘make their boat go faster’. We heard from Josh Down and Thomas Barta from ENI Engineering. To start off, Josh gave us a summary of what a leading-edge application of AI in manufacturing looks like, based on the video interview with Eberhard Klotz from FESTO we presented at this year’s Manufacturing Industry conference. That will be uploaded here on our LinkedIn Group
Josh then moved to sharing how ENI have begun trialling using AI in their operations, including mentioning that they’ve begun using Microsoft’s Copilot AI for Generative AI functionality, as it’s already bolted on to most Microsoft 365 products. Of course, generative AI will only ever be as good as the data it’s been trained on or has access to on the Internet, and Josh and Thomas expressed confidence in Microsoft in that respect, as well as their assurances regarding the security of their data. Josh also described the ‘crowd-sourcing’ approach ENI took to introducing AI, making the tool available to a number of their employees and meeting every Friday to exchange insights and experiences. Josh also mentioned several use cases where ENI, in spite of only being in the very early stages of adopting AI, have made significant productivity gains in some areas.
In the discussion, several members in the audience who have already trialled AI in different capacities, shared their experience. Elsamari Botha from the University of Canterbury mentioned how the perception of “being extremely unique and niche” when it comes to trialling new technologies can stand in the way of people giving it a go. In the case of starting your journey with Generative AI or Machine Learning tools, Elsamari encouraged us to focus on using a tool, whether it’s ChatGPT Google’s Gemini, or another, rather than agonising over which tool to use. We discussed the importance of using the right prompts when setting tasks for the tool, but also that an interactive approach, refining prompts as you go along, may be more efficient than spending a lot of time working on the right prompt to start with.
• The key takeaway from last night was very simple – start using it. Don’t start with ambitious plans to use AI in every facet of your organisation, or think you have to be an expert up-front – just start having a go.
We’d like to extend our thanks to Josh Down and Thomas Barta for taking the lead and sharing with us what ENI have been up to.
Recent key developments in New Zealand
• We don’t want to be merchants of gloom all the time, and indeed there are indications that in manufacturing some of those who had very quiet order books are seeing a change for the better. However, the outbound migration figures in the graph above must be a matter of concern. We don’t have a reliable breakdown of how many of those emigrants have been working in manufacturing in New Zealand, but I suspect most of you will be aware of examples of that in your own company, or another one you are familiar with
• The figures in the above chart are only up to September 2023, because Stats NZ has cross-matched its data with migration figures from the Australian Bureau of Statistics, and the latter numbers are relatively slow to be released. Not only are the numbers of migrants to Australia up over a longer-term average, migrant numbers from Australia are significantly lower than that average. Between September last year and the end of May 2024, total annual departure numbers from New Zealand have lifted by another 28,300, suggesting that increasing departures from New Zealand are once again likely to be the biggest driver of the trans-Tasman migration flow
Recent key developments in the World
• More good news, albeit not from here: Manufacturing in the UK seems to be on an upwards trajectory (https://www.bdo.co.uk/en-gb/insights/industries/manufacturing/bdo-manufacturing-outlook)
Worth noting: While the most recent numbers for orders and output show a minor improvement over Q1/2024, jumps in investment and employment activities and intentions are much higher, indicating that manufacturers are expecting overall performance to grow over a longer period. That is also borne out when we look at orders only:
• And, finally, a recent analysis of employee retention across sectors of the UK economy (https://www.vestd.com/blog/employee-retention-report-2024 ) has manufacturing come up tops by a fair margin – median retention is 5.3 years, vs 3.7 years across all sectors. The lowest figure comes in for marketing (2.8 years). However, at least part of the explanation may come from the demographic profiles of the industries at the extreme ends of retention. 49% of the marketing workforce are aged between 18 and 35, whereas in manufacturing, over a third (34%) of manufacturers state the average age of their workforce is between 36-40 years old, 22% between 41-45 years old and 24% between 45-50 years old, meaning only 20% of employers in manufacturing have an average age of 35 years or less among their employees (2021 data).
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