Skill shortage in south a concern

Virginia Nicholls
Virginia Nicholls
Skill shortages continue to be a significant concern for employers, Otago Southland Employers’ Association chief executive Virginia Nicholls says.

Businesses were upskilling local staff, if they were available, by retraining on the job and, by necessity, they were also looking at skilled and unskilled migrant workers from offshore, Ms Nicholls said.

The latest BNZ-BusinessNZ Performance of Manufacturing Index, released yesterday, showed overall activity in Otago and Southland’s manufacturing sector for December was 47.9 points, less than the average of 52.5 during 2018.

In the regional breakdown, employment levels, production levels and deliveries of raw materials were the same, and new orders and stocks of finished products were in decline. The proportion of positive comments was sitting at 50%, Ms Nicholls said.

"The seasonal nature of this time of year, along with the Christmas shutdown, is a mixed blessing. It is good for some businesses and not for others," Ms Nicholls said.

The Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) , which came into effect at midnight on December 31, would provide some opportunities in tariff reduction this year for exporters to Japan, Canada and Mexico.

There were also opportunities in the future for wine and horticulture because of wine producers having duty-free access to Canada.

Global trade tensions were a concern, so having access to those markets, under CPTPP, was significant for exporters, Ms Nicholls  said.

Brexit uncertainty was continuing and was a significant concern to both exporters and importers.

"No matter what occurs, this will cause a significant disruption," she said.

Exporters were strongly encouraged to plan for the UK’s exit from the European Union on March 29.

"There is no doubt that these changes will cause extra costs and delays, unless a deal gets done at the eleventh hour."

Nationally, the manufacturing sector experienced a positive end to 2018. The seasonally adjusted PMI for December was 55.1.

A PMI reading above 50 indicated manufacturing was generally expanding, below 50 that it was declining. That was 1.4 points up from November and the highest level of overall activity since April. BusinessNZ’s executive director for manufacturing, Catherine Beard, said 2018 averaged 53.8 in activity, slightly ahead of the overall average of 53.4 since the survey began. However, it was still a noticeable dip in expansion compared with 56.2 over 2017 and 56 over 2016.BNZ senior economist Craig Ebert said the latest PMI result was all the more encouraging in the context of slowing growth in global manufacturing.

The latter was part of what was casting clouds around international GDP growth expectations going into 2019, he said.

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