Now; about that manufacturing crisis...

The opposition parties recently held a "parliamentary inquiry" into a "crisis" in the manufacturing sector. Labour, the Greens, NZ First and Mana had much of the wind taken out of their sails when the manufacturing sector rebounded strongly to levels not seen since before the Global Financial Crisis. It became clear that the "crisis" was manufactured.

There's more good news on the manufacturing front today. A report on High Technology Manufacturing has been released, and it paints a very rosy picture. You can view the full report here.

Economic Development Minister Steven Joyce is understandably upbeat; check this out:

The high and medium-high technology manufacturing sectors have shown growth and resilience despite global economic challenges, a new Government report shows.
The High and Medium-High Technology Manufacturing Sectors Report was today released in Christchurch by Economic Development Minister Steven Joyce.
High-tech manufacturing includes pharmaceuticals, aircraft manufacture, professional and scientific equipment manufacturing, and computer and electronic manufacturing. It is a small but fast-growing part of our manufacturing sector counting for 0.7 per cent of GDP and 3 per cent of our total exports.
Medium-high tech manufacturing products are diverse and range from domestic appliances, to motor vehicles and parts, milking machines and insecticides.  The sector is almost double the size of the high-tech manufacturing sector at $2.8 billion a year in exports.
“These sectors are making a substantial and growing contribution to our economy,” Mr Joyce says. “Both were affected by the Global Financial Crisis but, as the report shows, they have bounced back, overcome barriers and shown renewed growth since 2010.”
“High-technology manufacturing has developed from small beginnings to become a significant export earner – from $139 million in 1991 to $1.4 billion in 2012 – and is now growing faster than the New Zealand wine industry.
“The sector spends almost four times the New Zealand average on R&D and this investment is paying off. Firms in the sector are producing smart, innovative products that New Zealand is known for internationally.”

This is great news. The opposition parties complain long and loudly about New Zealand being a low-wage economy, but the kind of companies surveyed for this report are at the upper end of the manufacturing sector. As Joyce notes they are companies who invest significantly on R&D and product development.

Not everyone is impressed however. Labour's Economic Development spokesman David Clark has resorted to name-calling in his response:

David Clark
Economic Development Spokesperson
1 August 2013
Joyce gilds the lily on high-tech manufacturing
Claims today by the Minister of Propaganda Steven Joyce about the success of high-tech manufacturing are an exercise in spin, Labour’s Economic Development spokesperson David Clark says.

David Clark is often touted as one of the rising stars of the Labour caucus, and goodness knows, Labour needs some rising stars. But puerile stuff like this does little to advance Mr Clark's claims.

Steven Joyce however reports that the Government is far from resting on its laurels, and has set ambitious targets for the sector; read on:

“Under the Business Growth Agenda, the Government has set a target to increase exports to 40 per cent of GDP by 2025,” Mr Joyce says.
“Within the BGA there are 58 specific initiatives that directly relate to the high and medium-high technology manufacturing sectors. These include establishing Callaghan Innovation to encourage greater business investment in research and development, lifting R&D co-funding to $142 million per year, and helping to better commercialise smart ideas into successful products.
“This report shows there is a lot to celebrate about New Zealand’s high technology and medium-high technology sectors. It highlights the exciting opportunities that exist to grow them, and boost investment and jobs for New Zealanders and their families with strong economic policies that keep improving the competitiveness of New Zealand firms.”

The parties who manufactured a crisis in manufacturing should be delighted to see that the sector is not in as dire a state as they led us to believe. There is still plenty of work to be done, but there is genuine cause for optimism that the manufacturing sector, far from being in crisis has ridden out the GFC, and is now poised for significant success as the economy grows.

That's good news for all of us.