Sunday, July 16, 2006


According to Stuff some sectors are finding it tough;

Businesses might be feeling the pinch, but an unemployment rate at 3.9% is still about as good as it gets anywhere in the world.

But figures in fine print in the latest Quarterly Survey of Business Opinion tell a different story.

In manufacturing, for example, a net 25% of businesses surveyed by the Institute of Economic Research laid off staff during the three months to June.

The last time manufacturers did that was in 1997.

A net 14% of merchants - retailers and wholesalers - also laid off staff.

In both instances, the culprits were the same, said institute director Brent Layton.

Margins are being squeezed as costs soar - more than 60% of manufacturers and merchants reported increased costs, compared with 20% previously. Higher prices and a high dollar are largely to blame.

Profits are down - for 49% of merchants and 38% of manufacturers.

Businesses say they intend to raise prices to recover those squeezed margins, but markets are so competitive that few do.

Instead, workers are laid off.

On the plus side the services and building industries are holding up well.


Anonymous said...

SURE times are tough - LOL - been to Sylvia Park lately?

For every $1 the government spends on welfare, it would probably make 50 or 60 cents back in taxes - company tax, PAYE, NRWT etc.

Welfare isn't paid out and then lost. It is one of the reasons we have near-full employment. It is guaranteed spending within the economy that props the economy up in bad times, and causes it to surge ahead in good times. You can oppose welfare on idealogical "They should work for their money like I do" grounds, but think about the economic flow-on effects.

The welfare state is entirely sustainable - you spout pure bullshit and you will not get away with it Lindsay.

Lindsay Mitchell said...

Every $1 government spends on welfare was taken off a productive individual or business. Left in their pockets it would be spent, invested or saved. Put in a beneficiaries it will be spent. What our economy needs right now is savings and investment.

Currently New Zealand has around half a million people aged 65 plus. That number will rise to 1.3 million by 2051 if Statistics New Zealand projections hold water. That's a 273 percent increase.

By contrast, the working-age population will only increase from 2.7 million to 2.9 million - a mere seven percent rise. And the number of 0-14 year-olds will actually decrease.

For other projections showing that the welfare state in its present form is unsustainable see

Oswald Bastable said...

Let's not forget the money wasted in administering handouts.

Unknown said...

Right Ruth - cos Sylvia Park has how many exporters / producers?

So yes you are right - taking money off the productive to give to beneficiaries will lead to a continuation of the inflationary spending glut that we are already experiencing.

It is not *our* idealogy that produces the current account deficit, inflation pressure etc - that would be your wonderful Government and unproductive spending.

Not all spending is equal.

Anonymous said...

Ruth...economic genius...NOT!

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