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Recent key developments in MAKE│NZ
We’ve now confirmed the programme for our conference – it’s an exciting line-up of contributors, most of whom will have been directly involved in the work they will report on.
In the first session, where the topic will be Leading through Change, we’ll be hearing from Rebecca Phillips and Ben Rae from The Comfort Group – a company that is going through quite a bit of change at the moment. And Tony Smale will tell us about the importance of understanding the cultural background of the different parts of our workforce when it comes to leading through change.
In the second session, Raising Levels of Engagement, we’ll hear from Natalie Smith and Lucien Thiele from Kiwicare, and Sara Ogier and Michael Anderson from Wyma Solutions – two companies that have put a lot of effort into that, and are now able to point to a good return on that investment. John Eatwell will tell us what ‘engagement’ really is about from his experience.
These two sessions are focused on the ‘people’ element of improving productivity. The third and final session will focus on technology – Using digital tools to make the boat go faster. We’ll hear from Energyline (Aaron Haines), Argus Manutech (Nathan Hay) and the Christchurch Engine Centre (Carl Broxup), about their experience with getting Networked Manufacturing (Industry 4.0) actually making a difference in their operations
These will all be reports and ‘war stories’ from the coalface – work the presenters themselves have done, and what worked for them, and what didn’t. Don’t miss out on what will be a great opportunity to learn from those that have ‘been there, done that’! For full details of the programme, and to register, please follow this link
• Last week we polled you, the reader, on your thoughts on the length and relevance of Manufacturing Matters. On the one hand, we seemed to have the same number of you all as usual reading, but we only had a small handful click on a thumbs up or a thumbs down, a slightly disappointing ratio…
From the small sample size we received only positive feedback for relevance, which is wonderful to hear (though criticism is often the way to improvement as uncomfortable as that is, so don’t hesitate to tell us the good and the bad). When it came to length of the newsletter itself the results were a 50/50 tie on too long vs just long enough. We’re working now to reduce the length, at least from time to time, and we’ll check back in with you in the future to see what you think. Hopefully we’ll beat the record for how many applied this time around!
• We are pleased to see that one of our own, Community Ambassador, Bryn Thompson, has been appointed to the Strategic Advisory Board of Competenz. Bryn has a lot of passion, knowledge and experience in and for vocational education and training, including serving on the Board of Competenz in an earlier incarnation for over 7 years, also as deputy chair for Work Based learning once all the ITO’s were merged into TePukenga, also the ARA board for 3-years. Today, Competenz plays a leading / strong part of the support framework for many sectors mostly within many levels of manufacturing. Its exact future role in government-supported vocational education and training is yet to be defined as part of current changes we’ve discussed here recently in issue 23 and issue 25. However, we are confident that, whatever the outcome, Competenz will continue to play a key role in supporting work-based learning in manufacturing. Please reach out to Bryn to arrange an in-person coffee catch-up so he can learn more about your current and future needs for on-job training and also another ways MAKE|NZ can be more supported for you and your sector (ambassador@makenz.org ).
Recent key developments in New Zealand
• “We will be spending more on defence. We will be getting as close to two percent as we possibly can,” – the Rt. Hon. Christopher Luxon, Feb. 18, 2025. “Two percent doesn’t cut it now – we’ve got to step-up and play our role in a very changed and challenging world. Our whole trade and economic future depends upon that, because countries are judging us by it”, Foreign Minister Winston Peters on March 1, 2025.
The picture hardly changes when we look at spending on defence as a share of total government expenditure (https://data.worldbank.org/indicator/MS.MIL.XPND.ZS?locations=NZ)
Unemployment is relatively high by New Zealand standards, but not when compared internationally. And, as youTo move up to the latest global ‘Gold Standard’ for defence expenditure – 3% of GDP – New Zealand would have to spend another almost 7 billion dollars, if we stick with 2023 figures. The actual defence allocation in the FY 2023/24 budget was NZD 5.3 billion …
The question for us is – (how) will the significant increases in defence spending here and overseas benefit New Zealand manufacturers? For those companies already involved in military procurement, including dual-use products, and serving parts of a global market, there will be opportunities to grow their business. Others may well find opportunities to enter that market, given the rapidly changing nature of warfare and the technologies now deployed there – just think about the huge growth in the role of drones.
We couldn’t find any data on the share of New Zealand manufacturing that is serving the (global) arms market, including dual-use products. However, even in countries that are regarding as major arms producers, like the UK, that share isn’t actually that high – the data below is for 2021. Another estimate puts the share of defence alone at 2% to 3%.
However, the current and recent increases in defence contracts supporting Ukraine are having a major impact on selected companies. German arms manufacturer Rheinmetall grew sales in the first nine months of last year by 36% and gross profit by 72%. And the recently announced additional 5,000 air defence missiles for Ukraine, to be made by the Thales arms factory in Belfast, will be a welcome boost to that business; a recent contract under the same framework was worth £162 million for the delivery of 650 missiles.
The impact of any increase in New Zealand’s defence spending on our manufacturing sector will depend on the degree to which government procurement can secure a local component in any equipment purchased overseas. A potential downside will be the worsening of our trade deficit as a consequence of major procurement contracts to overseas suppliers, and the impacts of that on the development of our economy.
Recent key developments in the World
• What is happening in the farm machinery and equipment sector in the US? A major decline in US sales recently, leading to a sharp drop in income, as exemplified here by two of the major manufacturers, John Deere and AGCO
• The reason(s) behind this decline? It’ll be due to more than one factor, but the sharp decline recently in prices for the major US cash crops, and the resulting drop in farm profitability, will no doubt be a contributing factor. Global agricultural commodity prices are projected to decline another 4–7% in 2025 due to oversupply and reduced Chinese import demand.
These declines coincided with a 17.8% increase in production costs since 2017, including spikes in fertilizer (up 89% from 2020–2022), labour (up 15% since 2021), and interest expenses (up 37% in 2024). The result is a major drop in net farm income:
• The drop in NFI would be a lot worse, were it not for a massive expansion of already high government subsidies. Direct government payments are forecast to grow by 354.5% from $9.3 billion in 2024 to $42.4 billion in 2025, accounting for 23.5% of total NFI. The American Relief Act of 2025 authorised $32.8 billion in supplemental assistance, primarily compensating producers for 2023–2024 losses from natural disasters and trade disruptions.
• Does any of this matter to New Zealand manufacturers? Well, StatsNZ reported $687 million of mechanical machinery and equipment exports to the USA in 2024. This includes products such as agricultural machinery (for example, harvesting machines and grading or sorting machines for fruits), engines, and machine tools.
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