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Recent key developments in MAKE│NZ
•As promised, we bring the results from last week when we asked you what’s helping you improve your labour productivity?
Process changes has come through has the biggest driver – though of course choosing the right processes to change and how, along with how to then implement the change, is never easy. If you have any examples you’d like to share with the community about some successful (or not so successful) attempts at improving labour productivity we’d love to hear them (sabine@makenz.org).
•For our advocacy work with central government, MAKE│NZ works closely with other industry business organisations in an informal group called the New Zealand Manufacturing Alliance. That Alliance is now starting to prepare for next year’s general election. What we are really keen to hear from you about is what your top three (or top five) things are the next government should do / change / fix? Please send your answers to dieter@makenz.org.
From experience we know that the response rate to requests like these is not overwhelming. However, if you want to have a say in the direction our advocacy should take …
This week we have two community related events to share*:
•Tickets are now available for the New Zealand Aerospace Summit 2025, the country’s largest gathering of space and advanced-aviation innovators. Join us in Christchurch on 7 – 8 October 2025 as we explore “Open Skies: Leveraging New Zealand’s Low Air Traffic and Rapid Regulatory Environment.”
If you’re interested in attending you can find more information and tickets HERE
•On the 1st of October, the Mechanical Engineering Department at the University of Canterbury is hosting an “Industry Connect” networking event to promote discussions between UC, industry, and engineering students. This event is a great opportunity to meet students and share you perspective of what it is like working as an engineer, and will also be a useful opportunity to learn about what the mechanical and mechatronics student-led clubs are doing.
If you’re interested in attending you can find more information and tickets HERE
*Note – MAKE│NZ is not sponsored by any of the events promoted, this is purely us sharing knowledge of events that we believe the manufacturing community might benefit from.
Recent key developments in New Zealand
•Statistics NZ last week provided an update on how New Zealand’s GDP developed in Q2, 2025, with an 0.9% decline for the quarter:
Now, while, understandably, quarterly results can create disquiet, especially when they are out of line with consensus forecasts, they still reflect short-term developments only. Of more concern should be the fact that the annual trend has been pointing downwards for 24 months now. Compare that with Australia, for manufacturers their biggest export market, and most likely, the most important destination for those quitting their manufacturing jobs and heading overseas.
The other thing that was singled out in the Statistics NZ release was the fact that the GDP for Transport and Equipment Manufacturing had dropped by 6.8% for the quarter. That sounds dramatic – but it is not unusual. That sector experiences significant fluctuation in the sales and delivery of major orders, meaning the amplitude of deviations from the long-term trend will always be bigger than that for the economy overall:
Note also that major fluctuations tend to be in line with the economy overall, as in the case of the COVID-19 pandemic but can also be ‘out of line’ with the latter. In our own conversations with manufacturers in Canterbury and beyond, we consistently get a ‘mixed bag’ picture. Some companies are doing (very) well, others not so much. If there is any consistency, it’s for those exposed to the domestic construction industry – not doing well.
•On the wider topic of New Zealand’s future economic development, Treasury projects annual GDP growth of 2.9%, or 3.0%, respectively for the next four years from 2026 to 2029. And commenting on this government’s policies for economic development, Prime Minister Christopher Luxon in an interview yesterday said the following in response to a question about the government’s plan(s) for growing New Zealand’s economy in an era of growing trade uncertainty: “We do have a plan, and the plan is we’ve actually got massive investment and focus on trade, which we want to be doubling the value of our exports, and we’re on track for doing that. We’ve had record years on dairy, red meat and horticulture, which is fantastic, tourism is bouncing back …”
n.b. – unless noted otherwise, all dollar values in the section below have not been adjusted for inflation.
Putting things in perspective, as a recent Treasury report showed, dairy exports have grown rapidly (quarterly figures below), with sales actually almost doubling for the 10 years to 2024:
Milk powder exports grew by 109% between April 2008, and April 2024. Of that, more than half (52%) were due to the growth of exports to China.
Also, as indicated in the graph above, and shown in more detail below, annual dairy production has essentially been flat for the past 10 years:
Given the fact that much of the recent increases have been due to price – rather than volume – increases, it pays to look at the development of dairy product prices over time, based on prices recorded at the Global Dairy Trade platform. These are average price changes in relation to the historic reference date of 1 April, 2011. Obviously, the picture may change significantly for other reference dates:
Looking at the other major commodity, meat, and again based on findings from a recent Treasury report:
Again, we find that price rises are behind the increasing export revenues, with production (volumes) growing a lot more slowly:
Last, but not least, and again quoting Treasury, a recent risk report outlined the potential economic impact of a large-scale adverse event. Of note here is the biggest risk, an outbreak of foot and mouth disease, which would directly impact both of our biggest current export earners. Fortunately, New Zealand still maintains a vigorous biosecurity regime that greatly reduces the risk of such an outbreak, and makes provisions for managing an outbreak, should it occur. But eliminate the risk, it can’t.
Note: The blue bars indicate the possible range impacts according to available published research. The yellow hatched area indicates Treasury officials’ assessment of the likely impact in a real-world scenario (i.e., accounting for potential over- or under-estimation by economic models).
Thus, when New Zealand’s Prime Minister is telling us that, thanks to the government’s plan, New Zealand’s exports will have doubled by 2035, and lists dairy and red meat as the prime contributors to that achievement, does he know something we don’t?
Recent key developments in the World
•We briefly talked about manufacturing in Australia in last week’s newsletter. There is a general perception that – when it comes to manufacturing, as for a number of other aspects of life – “things are better over there”.
One of the things that is better in Australia is that in the Australian Industries Group [AIG] they have a substantial business organisation dedicated to manufacturing, with over 60,000 paid-up members. Which means they can afford to employ a (small) team of economists that can compile substantive reports on the state of manufacturing in the country. Like this one, from July 2025. Which doesn’t exactly paint a rosy picture. In 2024, total industry sales rose by 0.6%, which, adjusted for inflation, means a decline of 1.2%. A recession, in other words. Employment across the sector rose by 1%, profits fell by 3.3%.
•There are global megatrends that are being accepted as fact – or not, depending on individual perceptions. Projections on these trends can be subject to significant uncertainty. And sometimes the disputes around the topic can get quite passionate, especially when individual and collective perceptions may well be related to material interests.
And then there is one such megatrend that is global in its impact and projections can be made with a high level of certainty. Which is more than can be said about all of its likely consequences, even though some we know about, and they are making their presence felt already. And yet, in spite of that – or because of that – there is hardly much dispute around that trend; it still goes largely ignored. Maybe that is because we know it is beyond our control?
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