Manufacturing Update

October 7, 2017

Fonterra is exporting into 36 of 54 African countries and aims to expand its footprint as demand grows across the region.
“The increasing incomes and population growth of Africa are really driving the middle class of African consumers, and those consumers are getting more and more sophisticated and demanding higher quality foods. Dairy nutrition is a key cornerstone to that,” Josh Hosking, sales director for Africa NZMP said.
The NZMP portfolio includes ingredients such as whole milk powder, skim milk powder, proteins, cheese and dairy fat.

Last month, the Queensland Productivity Commission released its draft report, targeting costs, productivity and government programs – essentially putting forward a plan of action to make the state’s manufacturing sector more productive and competitive.
Principal Commissioner, Kim Wood, said the Queensland Government had asked him for policies that would support the strong and diverse manufacturing industry, which employs 169,000 workers.
“Undoubtedly, the manufacturing sector is facing external pressures, including strong domestic and international competition, rising input costs such as gas and electricity, and changing consumer needs.” Said Wood.

Large government funded projects in NSW and Vic are providing a positive source of demand, as is a strong pipeline of solar and wind power projects.
However, manufacturers across many sectors are seeing challenges from soaring energy costs, higher raw materials costs the stronger Australian dollar, and ongoing weakness in the retail sector.

Australia’s manufacturing sector has expanded for the tenth consecutive month in July, with the latest Performance of Manufacturing Index (PMI) from the Ai Group rising one point to 56.0 during the month.
Ai Group’s key findings for July showed that six of the seven activity sub-indexes in the Australian PMI expanded in July with new orders (down 3.7 points to 55.8) and sales (down 5.1 points to 55.8) continuing to expand, while employment rose by up 8.4 points and is now back into positive territory at 57.4 points.
Commenting on the July readings, Ai Group Chief Executive, Innes Willox, said the broadly-based expansion of manufacturing contributed positively to the rebalancing of the broader economy.