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Recent key developments in MAKE│NZ
•Another familiar face, our past president of the board and CFO for Fabrum, John O’Callaghan
Can you share a quick summary of your background in manufacturing and what got you interested in the field?
I began my journey as the CFO of Tumblar Products Ltd and eventually stepped into the role of CEO. I’ve always enjoyed the process of creating and selling something tangible—it’s deeply satisfying. What I value most is the concept of a team, much like a well-run manufacturing process: when everything works in harmony, it’s truly a beautiful thing.
What got you interested in joining the MAKE│NZ board?
Enjoyed talking to like minded people on their business challenges.
What do you think is the biggest opportunity—or challenge—for manufacturing in the next 5 years?
As an accountant, I focus on sustainable profitability. Achieving this requires constant evaluation and action across a wide range of challenges—labour shortages, supply chain resilience, cost control, margin pressure, technology adoption, continuous improvement, capital investment, quality assurance, and ESG commitments. Each of these elements must be managed proactively to ensure long-term financial health.
If you could offer one piece of advice to emerging leaders in manufacturing, what would it be?
Hire good people.
Outside of manufacturing, what’s something you’re passionate about that people might not know?
I like to play golf.
•A final reminder about the Womens Group get together!
If you’re a woman passionate about manufacturing, or you know someone who is, get in touch for the details about our first meeting tomorrow (The 12th of November) (sabine@makenz.org).
•Many of you will probably be familiar with the PMI, jointly organised by Business New Zealand and the BNZ. It’s an index measuring the performance of manufacturing businesses in New Zealand, based on a monthly survey of manufacturing leaders. Participants are asked whether conditions for a number of business operational variables have improved, deteriorated or stayed the same compared with the previous month. Responses are then aggregated into a single index value. Here’s the latest example from October 2025:
If this doesn’t at all reflect what is happening in your own business – did you participate in the survey?! We all know about ‘survey fatigue’, but the PMI is a global index spanning all the major manufacturing countries, and it relies on a sufficient number of contributors to provide an accurate picture of the situation in each country.
If you are happy to participate in the survey, which will only take you about 3 minutes to complete each month, please let us know: dieter@makenz.org // sabine@makenz.org
Recent key developments in New Zealand
•By New Zealand standards, Christchurch is a very cyclist-friendly city. And yet, as those of us who cycle will confirm based on their own experience, it is not without risk. The evidence isn’t particularly strong, but it appears that the most common scenario of car vs cyclist collision is at T intersections, with the most common explanation provided by car drivers that they did not see the cyclist. Interestingly, one study reported that “the proportion of drivers not noticing a cyclist prior to a crash was not significantly different regardless of whether they were wearing high-visibility (“hi-vis”) clothing or not.” Which makes one wonder whether the root cause for the accident was something else – the inability, for example, to correctly assess the speed of the bicycle.
In New Zealand, there is no formal training requirement before one can obtain a driver’s licence; one only has to pass a theoretical and a practical examination. In other countries – continental Europe, for example – the requirements are (much) more stringent, in most cases requiring evidence of formal practical driving lessons (driving school). In some countries these can now be partially done in simulators to keep costs down.
What’s that got to do with manufacturing? We can use this example to ask and answer two questions:
- What – if any – are the benefits of having level-appropriate consistent and standardised skill sets (levels) across the manufacturing workforce?
- What is the role of formal training in achieving consistent and standardised skill sets (levels) across the manufacturing workforce?
There is a number of threads we need to unravel here. At a fundamental level, solid research on both questions is scarce, but there is a reasonable level of evidence suggesting that formalised training can improve productivity in manufacturing, for example – see here and here, and especially so in times of rapidly changing skills requirements and persistent skills shortages across manufacturing economies.
Another thread of evidence comes from the area of formal training to improve workplace health and safety. A reverse argument can also be made on the basis that for certain manufacturing activities where a high and consistent standard of performance is mandatory, evidence of formal training – such as a welding certificate – is required.
We can also look at the data on the actual level of formal training in the manufacturing workforce across different countries. In the graphs below, the data is for formal qualification levels across the entire workforce. There is no breakdown available for manufacturing, but it is reasonable to assume that, if anything, levels will be higher in manufacturing than averaged across the entire workforce. High corresponds to ISCED 2011 levels 5-8 / NZQF Levels 5-10; Medium to Levels 3 and 4 / NZQF Levels 3 and 4, and Low below that on both scales.
For New Zealand, we do have separate data for the manufacturing sector. Data courtesy of Infometrics and Hanga-Aro-Rau:
As we can see qualification levels in manufacturing have improved slightly between 2018 and 2023 but are higher at the ‘low end’ than across the entire workforce.
Compared European examples quoted above, the levels are significantly lower. In particular, when considering that the majority in the second group (L1 to 3) will be people at Levels 1 and 2 who would be included in the Low category in Europe.
Does that mean our manufacturing workforce is, on average, less skilled than the French one, for example? Not necessarily. It just means that for just under half of our workforce we have no formal evidence of what their skills are. Individual employers will, of course, know and these workers contribute to the success of their manufacturing business. They are, in all likelihood and in most cases, at least adequately skilled for the job they do.
There is another ‘unknown’ here, however: what more would workers be capable of when their (formal) skill level has never been assessed beyond the skills required to do the job assigned to them. There is consistent evidence across OECD countries of significant overqualification / underutilisation of existing skills, including in manufacturing – see here, and here, for example.
And if workers want to change job, they have no standardised evidence of their skills, which is both to their disadvantage, and that of their prospective new employer. Plus, at an industry level we have no way of tracking progress in skills and qualification for about half of our workforce.
We are looking forward to the about-to-be created Industry Skills Boards to work with and help manufacturers improve the situation …
Recent key developments in the World
•Last week’s newsletter includes a graph showing a decline in manufacturing industry investment in building new factories in the US. It didn’t include an explanation for that trend. Here’s a recent Economist graph that may help to shed some light on the issue:
There is evidence indeed for increasing competition for labour and materials in the US non-residential construction industry. Data from the cement industry, for example, suggest that while the cement intensity is much lower in data centre construction than in other non-residential construction, the massive increase in the construction of the former still means that their share of cement consumption will continue to increase, especially in regions where data centre construction is concentrated:
Year-on-year to June 2025, almost half of all the construction companies surveyed consistently reported that while they are increasing employee numbers, they are still not resolving the ‘labour crunch’ in the industry, especially in states like Texas. Take the concreting business, for example.
•Machinery and Equipment manufacturing is the second biggest contributor to Germany’s manufacturing sector:
And Germany is still a close third behind the US for global market share [€ m]
However, as indicated above, Germany’s machinery and equipment manufacturing has been in decline for two straight years now, with the latest data for Q3/2025 showing a year-on-year decline of 6% in new orders. While there appears to be a change in trend in France and the UK, and in the EU overall, that reversal is not showing for Germany:
While the EU in total, and Japan, appear to have at least stopped their decline, the positive trend is much stronger in the US:
The vast majority of machinery and equipment manufacturing globally is for capital goods, so investment intentions for capital goods are a good predictor of future orders. Not much solace for German manufacturers here, either, given that their biggest export market recently has been the USA, followed by China and France:
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