Economic Survey of Manufacturing: September 2008 quarter

All references to sales movements are seasonally adjusted unless otherwise stated.

All manufacturing industries

The volume of manufacturing sales decreased 2.3 percent in the September 2008 quarter, following a decrease of 1.1 percent in the June 2008 quarter. It is now at its lowest level since the first half of 2003. Volumes are calculated by removing the effect of price changes from values.

 

Although the volume of sales is down, increased prices for meat, fertiliser and other goods led to a rise in sales value of 1.3 percent ($265 million) in the September 2008 quarter. This follows a decrease of 0.5 percent in the previous quarter.

Increases in sales values occurred in five of the 15 published industries in the September 2008 quarter. The largest increase was in the meat and dairy product manufacturing industry, up 3.0 percent ($178 million), followed by the petroleum and industrial chemical manufacturing industry, up 16 percent ($135 million) and the transport equipment manufacturing industry, up 18 percent ($135 million).

Decreases in sales values occurred in ten published industries in the September 2008 quarter. The largest decrease was in the machinery and equipment manufacturing industry, down 3.4 percent ($65 million), followed by the non-metallic mineral product manufacturing industry, down 5.7 percent ($43 million).

 

Stocks of finished goods, which are not seasonally adjusted, decreased in value by 6.8 percent ($564 million) from the June 2008 quarter but are up 13 percent from the September 2007 quarter. After removal of price changes, the volume is down 7.1 percent from the June 2008 quarter and up 0.8 percent from the September 2007 quarter. The meat and dairy product manufacturing industry was the main contributor to the stock movement this quarter.

The trend for sales values shows a rise for the sixth consecutive quarter but the rate of increase has eased considerably compared to late 2007 and early 2008.

All manufacturing excluding meat and dairy product manufacturing

The volume of sales fell 3.2 percent in the September 2008 quarter, following a rise of 0.7 percent in the June 2008 quarter. Three industries each contributed about a fifth of this decrease: structural, sheet and fabricated metal products; paper and paper products; and machinery and equipment. The main increase was for the transport equipment manufacturing industry.

The value of sales, which was boosted by price rises, increased 0.1 percent ($18 million) in the September 2008 quarter, following an increase of 2.0 percent ($295 million) in the June 2008 quarter. 

 

Petroleum and industrial chemical manufacturing and transport equipment manufacturing showed the largest rises in sales value in the September 2008 quarter but were counteracted by smaller-sized falls for numerous industries, including machinery and equipment manufacturing, non-metallic mineral product manufacturing, and furniture and other manufacturing.

Stocks of finished goods, which are not seasonally adjusted, increased in value by 10 percent ($534 million) from the June 2008 quarter and are also up 10 percent from the September 2007 quarter. The volume of stocks rose 5.8 percent from the June 2008 quarter and 2.2 percent from the September 2007 quarter.

The sales trend continues to rise, and is up 21 percent from the June 2003 quarter low-point.

Meat and dairy product manufacturing

The volume of sales for this industry rose 0.3 percent in the September 2008 quarter, after falling 8.1 percent in the previous quarter. A sales value increase of 3.0 percent ($178 million) was recorded in the September 2008 quarter. This follows a fall of 8.4 percent in the June 2008 quarter but before that there were four quarters with a combined rise of 35 percent. Meat prices rose 10 percent in the September 2008 quarter, while dairy prices fell 2.5 percent, according to industry outputs in the Producers Price Index release. 

 

Stocks of finished goods, which are not seasonally adjusted, dropped 34 percent in value from the June 2008 quarter, but are up 21 percent on the September 2007 quarter. Stocks in this industry typically rise in the December and March quarters then fall in the following two quarters. After removal of price changes, the volume is down 36 percent from the June 2008 quarter and down 4.2 percent from the September 2007 quarter, implying that prices remain relatively high.

The trend for sales values shows falls for the latest two quarters following medium to large rises in the previous four quarters.

Petroleum and industrial chemical manufacturing

This industry includes petroleum refining, petroleum and coal product manufacturing, and fertiliser and other industrial chemical manufacturing. The main output, in value terms, is fertiliser.

The volume of sales for this industry rose 3.2 percent in the September quarter, following a rise of 10 percent in the previous quarter. The value of sales also rose, up 16 percent ($135 million) in the September 2008 quarter, following a rise of 11 percent in the previous quarter. These figures indicate that most of the September quarter rise in sales value was price-related, whereas the rise in the preceding quarter was mostly quantity-related. 

 

Output prices, as measured by the Producers Price Index, leapt 15 percent in the September 2008 quarter, following a decrease of 1.6 percent in the previous quarter.

Stocks of finished goods, which are not seasonally adjusted, were reported at a high level in the September 2008 quarter, up 83 percent in value from the preceding quarter. After removal of price changes, the volume shows a rise of 56 percent. This means that increased quantities and higher prices were both important contributors to the large increase in stock value.

The trend for the value of sales shows rises for the latest seven quarters, with the bulk of the upward movement concentrated in the June and September 2008 quarters.

Transport equipment manufacturing

This industry includes the manufacture and repair of a variety of transport equipment including ships, locomotives and aircraft.

Sales by this industry do not have a stable seasonal pattern, so are not seasonally adjusted.

The volume of sales for this industry rose 11 percent in each of the September and June 2008 quarters. The value of sales, because of price increases, showed larger rises, up 18 percent ($135 million) in the September 2008 quarter, following a rise of 14 percent in the June 2008 quarter. Most of the latest rise is aviation-related. 

 

Output prices, as measured by the Producers Price Index, rose 6.5 percent in the September 2008 quarter and 3.2 percent in the June 2008 quarter.

Stocks of finished goods, which are not seasonally adjusted, rose 46 percent in value during the September 2008 quarter, mostly because of aviation-related stocks, and are up 34 percent from the September 2007 quarter. The volume of stocks rose 38 percent in the September 2008 quarter and is up 21 percent from the September 2007 quarter.

The trend for the value of sales shows rises for the latest six quarters, with most of the overall increase for these quarters occurring in the June and September 2008 quarters.

Machinery and equipment manufacturing

This industry includes the manufacture of industrial electronic equipment and appliances, and photographic and scientific equipment.

The volume of sales for this industry decreased 4.7 in the September 2008 quarter after rising 1.4 percent in the June 2008 quarter. The value of sales decreased 3.4 percent ($65 million) in the September 2008 quarter, following an increase of 0.8 percent in the June 2008 quarter. 

Output prices, as measured by the Producers Price Index, decreased 0.3 percent in the September 2008 quarter, following a rise of 1.5 percent in the June 2008 quarter.

Stocks of finished goods, which are not seasonally adjusted, rose 2.6 percent in value during the September 2008 quarter but are down 6.8 percent from the September 2007 quarter. The volume of stocks rose 1.8 percent in the September 2008 quarter but is down 11 percent from the September 2007 quarter.

The sales trend shows downward movement for the latest two quarters, following five quarters of increases.

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Revisions

Corrections to data received earlier have resulted in revisions to the meat and dairy product manufacturing industry for the September 2007 quarter. These revisions have had a flow-on effect on higher-level series and on seasonally adjusted and trend series.

Measurement errors

The Economic Survey of Manufacturing applies imputation methods for estimating values for small firms and non-response, and, like all statistical surveys, is subject to measurement errors, including sample errors and non-sample errors. These measurement errors affect the accuracy of the published statistics. For more information on measurement errors, please refer to the Technical notes of this release.

Sample errors

The postal survey was designed to give statistics at the following levels of accuracy (at the 95 percent confidence interval limit):

• 5 percent for sales, salaries and wages, and value added at the total manufacturing level
• 10 percent for sales, salaries and wages, and value added at the published industry level, where value added is calculated as follows:

value added = sales – purchases + stock change

This means, for example, that there is a 95 percent chance that the true value of total manufacturing sales lies within 5 percent of the published estimate.

Sample errors are calculated each quarter for absolute values and for changes in value from the previous quarter.

The sample errors for the September 2008 quarter, at the 95 percent confidence interval limit, are:

Industries with zero sample error are full-coverage industries. In these industries all large firms are surveyed and all small- to medium-sized firms are modelled using administrative data from Inland Revenue.

Imputation

Small firms

Small- to medium-sized firms are generally not surveyed. Their variables are instead modelled from administrative data from Inland Revenue. Ratios calculated from the postal sample responses are applied to the administrative data to provide estimated values

Non-response imputation

Although attempts are made to achieve a 100 percent response rate, in practice this does not occur. Values for non-responding businesses are estimated using a range of methods, including:

• regression imputation
• historic imputation
• mean imputation.

Regression imputation involves estimating the variable of interest from the unit's administrative data (GST sales), based on the relationship shown by similar businesses. Historic imputation involves multiplying their response in the previous period by a non-response factor. The non-response factor is the average movement over the quarter of similar businesses. Mean imputation involves estimating a value for a unit by using the average value for a set of similar businesses.

The table below shows percentages of sales imputed in the September 2008 quarter:

 

Response rate

The response rate applies to the postal sample and gives the proportion of sales obtained from survey responses (compared with being imputed). The Economic Survey of Manufacturing has a target response rate of 85 percent. The response rate achieved for the September 2008 quarter was 91 percent.

For technical information contact:
John Gudgeon or Blair Cardno
Christchurch 03 964 8700
Email: subannuals@stat.govt.nz.   

Next release ...

Economic Survey of Manufacturing: December 2008 will be released on 16 March 2009