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Recent key developments in MAKE│NZ
So last week we put out a survey taking a look at current wage rates in the industry. The amount of responses wasn’t quite what I was hoping for, but this is a busy time for many. We’ll extend the deadline another week- and this time I’ve worked out how to embed the survey so you won’t have to go far to answer. This is completely anonymous and we’ll be coming back with general findings, so don’t be shy!
Otherwise we have two events for you, which both take place tomorrow!
First up in the calendar is an afternoon Production Managers Meeting.
This is in conjunction with The University of Canterbury. Most of you have been (or will be) working with a graduate engineer, most likely from the University of Canterbury. Did you ever ask yourself what these engineers actually learn and what they’re being taught in their studies? Do you know about all the cool activities taking place outside of their formal studies, for example in the student-led Professional Clubs?
If you haven’t gotten an invitation and you want your team to attend just reach out to the MAKE│NZ team and we’ll see what we can do. Otherwise we look forward to seeing those who have RSVP’d tomorrow!
The next event, a little later in the day, is the second Hardware Meetup NZ watch party in Christchurch. It’ll be from 5:30pm to 8:30pm at the Ministry of Awesome, presenting
“Internet of Things”
With some great speakers, including:
- John Wagner from AoFrio
- Rob Willcox from Eco Logical Automation
- Baden Parr from ProTag
It will also be a great chance to meet with some other manufacturers and chat over a slice of pizza. So if this sounds like a bit of you, you can find more information and ticket details HERE.
Recent key developments in New Zealand
•This book is now available in paperback in bookstores across the country. It’s a brilliant piece of advocacy for manufacturing and its role in society. And it’s deliberately written so you don’t need to be familiar with the world of manufacturing, let alone be an engineer, to read it. Buy it, read it, and lend it to anyone who has ever told you that “I didn’t even know we still make stuff in New Zealand”.
There is also a recent interview with the author that is well worth listening to.
•We haven’t been talking about energy prices for a while. For a variety of reasons, they’re not as bad at the moment as they were last year, at least for electricity, and at least for the wholesale prices published by the Electricity Authority. That doesn’t mean things are just fine for manufacturers. We keep getting reports of manufacturers being faced with significant price rises for long-term contracts when these come up for renewal, suppliers not even offering contracts, presumably because they can make more money in their own retail operations, and temporary restrictions on supply.
It also doesn’t mean the long-term challenges have gone away of security of supply and stable prices at a level that allows manufacturers to remain globally competitive. Through the Manufacturing Alliance, which we are part of, and an impressive group of other organisations, we have been working behind the scenes to push the government to come up with a strategy for the energy sector that will achieve what manufacturers (and others) need. Now we have also gone public; the open letter to the Prime Minister (below), published over the weekend in major newspapers, is just the start of that:
We now have our Prime Minister’s response (on RNZ yesterday morning): “The basic problem is that we don’t have enough gas, thanks to Labour screwing the scrum by banning oil and gas …”. When asked about the gentailers not investing enough in additional generation capacity, the PM’s response was “The single biggest thing is a supply problem, because New Zealand doesn’t have access to gas …”. In other words – Northing to see here, folks, moving right along …
Recent key developments in the World
•Just over two years ago, at a function organised by the Reserve Bank of New Zealand [RBNZ], the then-Governor, Adrian Orr, was asked what the RBNZ’s view was with respect to the future role of the US Dollar as the primary reserve currency for the global economy, given the growing role of BRICS in the global economy even then? The Governor’s answer was jokingly dismissive – “like that’s ever going to happen!” In the worst case, and not entirely unlikely, that was his actual view, and that of the RBNZ. In the best case, it was a political answer, avoiding to even acknowledge the topic, let alone comment on it.
Be that as it may, it’s now July 2025, and the leaders of the BRICS countries have just completed their 17th Summit in Rio de Janeiro, Brazil.
BRICS who?
As a formal grouping, BRIC started after the meeting of the Leaders of Russia, India and China in St. Petersburg in 2006. The 1st BRIC Summit was held in 2009. In 2010, it was agreed to expand BRIC into BRICS with the inclusion of South Africa. A further expansion of BRICS took place in 2024 with Egypt; Ethiopia; Iran and UAE becoming full members of BRICS from 1 January 2024. In January 2025, Indonesia joined the BRICS as a full member while Belarus; Bolivia; Kazakhstan; Cuba; Malaysia; Nigeria; Thailand; Uganda and Uzbekistan were inducted as partner countries of the BRICS.
What is BRICS about? The objectives of BRICS include strengthening economic, political, and social cooperation among its members, as well as increasing the influence of Global South countries in international governance. You can read more about it here.
BRICS does not claim or intend to be, or become, a union of nations, like the EU. That wouldn’t be possible anyway, given the diverse nature of its members, who will all continue to pursue and put their national interests first, but recognise that they have common interests among them. BRICS leaders have consistently pushed back against the idea that their group is inherently anti-American. They present themselves as advocates for “win-win cooperation” and a more inclusive global system. That doesn’t stop the US President from seeing things differently: ““Any country aligning themselves with the anti-American policies of BRICS will be charged an additional 10% tariff. There will be no exceptions to this policy,” he said in response to the declaration of the BRICS leaders after their recent summit in Rio de Janeiro.
Does any of this matter, and matter to us?
For starters, IMF data show that BRICS accounted for 40% of the global economy (measured by Purchasing Power Parity, PPP) in 2024, with projections rising to 41% in 2025. In 2024, BRICS collectively reached 4% GDP growth, while worldwide growth stood at 3.3%. BRICS says it is responsible for 24% of the world’s commercial exchanges. The total population of its five biggest members alone exceeds 3 billion people, and including partner states, makes up about 55% of the world’s total population. Moreover, while populations in many ‘Western’ economies are declining, that does not apply to BRICS (yet).
BRICS is growing in size – the sum total of its members’ populations, and their economies. What is also growing is the trade among them:
It is also reasonable to assume that the recent ‘geopolitical realignment’ involving many BRICS members, and US impositions of import tariffs, will further enhance trade among BRICS members.
The question remains – what does any of this mean to New Zealand manufacturers? More specifically, New Zealand manufacturers that purchase inputs from BRICs countries, or export their products to these countries? One area where it may matter is what currency will (have to) be used for these transactions.
What is, and what isn’t happening on that front? The common thread here is ‘de-dollarisation’ – the desire to avoid as much as possible using US dollars in transactions. Does that mean a common BRICS currency? Not in the near future, and may be never, especially as the number of countries involved keeps growing. Too many political, practical and legal obstacles. But that doesn’t mean the USD still rules. According to data released at the Rio de Janeiro Summit, about 90% of commerce among BRICS nations is now settled in local currencies, up from roughly 65% two years ago.
The plan, first mooted in 2018, is to set up BRICS Pay as a system designed to facilitate cross-border payments among BRICS nations. As an alternative to SWIFT, BRICS Pay leverages blockchain technology and digital payment solutions, including QR codes and digital wallets. The system aims to reduce transaction costs, increase transaction speed, and enhance security compared to the traditional SWIFT system. The system remains “under development”, with Brazil taking responsibility for the next phase.
Like many other questions, there is a divergence of views on speed at which to proceed towards ‘de-dollarisation’ with India in particular insisting that the latter is not really the aim of the exercise. That, apparently, doesn’t stop the US from thinking otherwise and threatening to take counter-measures.
There is no indication that, today or in the future, BRICS countries will enforce a substitution of the US Dollar with other currencies when dealing with non-BRICS countries. Whether they’ll develop a preference for that, and an increasingly strong preference, remains to be seen.
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