Why manufacturing is so important to NZ
Typically New Zealanders do not think of themselves as living in a manufacturing economy. But New Zealand’s manufacturing industries make an important contribution to the national economy. In the year ended September 2015, the manufacturing sector output accounted for around 10% of real GDP and 11% of the labour force.
But this misperception can have a detrimental effect on the growth of NZ manufacturing and we as kiwi’s should be aware and proud of how important manufacturing is to our country.
If we do not have the skills, talent and training coming into the industry then this could undermine the potential for growth. It is not surprising that some high- growth manufacturing firms emphasise skill shortages and other constraints on talent- driven growth as being much more important than any effects of costs or exchange rates.
It’s interesting when you look at surveys that highlight the traits of NZ manufacturing firms. Typically these firms are:
- Largely export oriented
- Predominantly locally owned
- Mostly privately held
- Vertically integrated in the domestic market and in offshore markets where they have a large presence.
- Still manufacturing in New Zealand where it makes sense for the entire or part of the production process to do so, and engaging in research, design and the provision of services.
So what makes us competitive?
Well, sometimes being a small country does have its advantages and the architecture of NZ firms can be seen as an advantage. By being local, privately owned companies we can be more specialised and therefore more focused on innovation rather than cost-minimisation.
A country of our size creates nimble companies that need to adapt to changes offshore, both political and economic. Take Donald Trump in the USA. Should we fear what’s happening in that market and how it will affect NZ manufacturing? I believe not. NZ companies are nimble enough to adapt – we’ve had to for years. We’ll either find a way to provide the USA with the solutions it wants or we’ll look to other markets like China, Europe, even the Commonwealth.
At Fero we feel we are small enough to care but big enough to deliver and we really stand by this. We are growing as a company but we do have very strong values and beliefs. We are always looking for ways to improve our processes and we are constantly building stronger ties with China. This relationship allows us to manage the processes and get some cost down but most importantly monitor quality and consistency.