Economic Survey of Manufacturing: September 2009 quarter

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

All manufacturing industries

The volume of manufacturing sales fell 1.4 percent in the September 2009 quarter, following a rise of 1.5 percent in the June 2009 quarter. The meat and dairy product manufacturing industry was the key contributor to both these movements. The sales volume for this industry fell 7.1 percent after a rise of 7.5 percent in the June 2009 quarter.

For industries other than meat and dairy, there were mixed results for sales volume movements in the September 2009 quarter. Six industries show increases, six show decreases, and two show little or no movement. The main changes were:

• wood product manufacturing, up 9.1 percent
• basic metal manufacturing, up 21.5 percent
• machinery and equipment manufacturing, down 4.4 percent.

Volumes are calculated by removing the effect of price changes from values.

The value of sales fell by 5.1 percent ($1,004 million) in the September 2009 quarter. This is the fourth consecutive quarterly fall and has lowered sales to the level last seen in early 2007. Driving the latest fall was a drop of 15.8 percent ($1,011 million) in sales values for the meat and dairy product manufacturing industry, resulting mainly from lower prices for dairy products. The other main changes in the September 2009 quarter were:

• basic metal manufacturing, up 14.6 percent ($85 million)
• petroleum and industrial chemical manufacturing, down 8.8 percent ($68 million)
• machinery and equipment manufacturing, down 4.0 percent ($66 million)
• transport equipment manufacturing, up 11.7 percent ($65 million).

The trend for the sales volume is down for the seventh consecutive quarter, while the trend for the sales value is down for the latest three quarters.

Stocks of finished goods, which are not seasonally adjusted, are down 8.7 percent in volume for the September 2009 quarter compared with the September 2008 quarter. Stock values, at $6.8 billion, are down 14.9 percent ($1.2 billion) from the September 2008 quarter, with meat and dairy product manufacturing the main cause of the fall.

All manufacturing excluding meat and dairy product manufacturing

The volume of sales, excluding meat and dairy product manufacturing, rose 1.0 percent in the September 2009 quarter. This rise follows falls in the previous six quarters that reduced the volume to the lowest level seen in 15 years. As detailed in the previous section, industry activity was mixed, with six industries up, six down, and two showing little or no movement. Wood product and basic metal industries were the main contributors to the latest rise, while the machinery and equipment industry showed the largest fall.

The value of sales fell 0.8 percent ($107 million) in the September 2009 quarter, the fifth consecutive quarterly fall. As detailed in the previous section, the largest falls in sales value were in the petroleum and industrial chemical, and machinery and equipment industries, while the basic metal, and transport equipment industries had the largest rises.

The trend for the sales volume is flat after five quarters of decline, while the trend for the sales value is down for the latest four quarters.

The volume of finished goods stocks, which is not seasonally adjusted, is down 10.5 percent for the September 2009 quarter compared with the September 2008 quarter. The value, at $5.2 billion, is down 8.3 percent.

 

Meat and dairy product manufacturing

Most dairy industry values in this survey are compiled on a non-standard quarter. The data has a one-month lag which means, for example, that the September quarter includes values for the months of June, July, and August. Monthly data is now available, and when there is a substantial time series and a new seasonal pattern can be established, dairy industry data (combined with the meat industry) will be published based on a standard quarter (such as July–September).

The volume of sales for the meat and dairy product manufacturing industry fell 7.1 percent in the September 2009 quarter, following substantial rises totalling 28.4 percent in the previous two quarters. Milk powder, butter, and cheese export quantities rose 2.0 percent in the September 2009 quarter, while meat and edible offal export quantities fell 16.0 percent, as published in the Overseas Merchandise Trade release.

The value of sales fell 15.8 percent in the September 2009 quarter, following a fall of 10.5 percent in the June 2009 quarter. Prices for dairy products, as measured by the producers price index, fell 10.9 percent in the September 2009 quarter, while prices for meat and meat products fell 0.3 percent.

The trend for the sales volume provisionally indicates a decline in the latest quarter, after recent strong growth. The trend for the sales value, which includes the impact of price falls, shows substantial decline in the latest two quarters.

The volume of finished goods stocks, which is not seasonally adjusted, is down 2.6 percent for the September 2009 quarter compared with the September 2008 quarter. The value, at $1.6 billion, is down 31.1 percent. This large drop is mostly attributable to the dairy industry, which, as mentioned above, is subject to a one-month lag in this survey.

 

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 fell 4.4 percent in the September 2009 quarter, following a fall of 7.1 percent in the June 2009 quarter. The series is at its lowest level in almost 11 years.

  

The value of sales fell 4.0 percent in the September 2009 quarter, following a fall of 7.8 percent in the June 2009 quarter. Prices for machinery and equipment fell 1.5 percent and 0.4 percent in the June and September 2009 quarters, respectively, as measured by the producers price index.

The trend for the sales volume shows a decline for the latest six quarters, while the trend for the sales value shows a decline for the latest four quarters.

The volume of finished goods stocks, which is not seasonally adjusted, is down 2.9 percent for the September 2009 quarter compared with the September 2008 quarter. The value, at $615 million, is down 2.1 percent.

Wood product manufacturing

The wood product manufacturing industry consists of log sawmilling, wood chipping, timber re-sawing and dressing, and the manufacture of plywood and veneer, fabricated wood, and wooden structural components.

The volume of sales rose 9.1 percent in the September 2009 quarter, making the wood product manufacturing industry the largest positive contributor to the movement in total manufacturing volumes. In the June 2009 quarter, this industry had a fall of 1.7 percent.

The value of sales rose 4.9 percent in the September 2009 quarter, following a fall of 3.7 percent in the June 2009 quarter. Prices for wood products declined 2.3 percent in the June 2009 quarter and 2.6 percent in the September 2009 quarter, as measured by the producers price index.

The trend series for the sales volume and the sales value provisionally indicate growth after about two years of decline.

The volume of finished goods stocks, which is not seasonally adjusted, is down 12.4 percent for the September 2009 quarter compared with the September 2008 quarter. The value, at $444 million, is down 15.9 percent.

Basic metal manufacturing

The basic metal manufacturing industry includes the manufacture of iron and steel, basic non-ferrous metals, and non-ferrous basic metal products. Sales for this industry do not have a stable seasonal pattern, so are not seasonally adjusted.

The (unadjusted) volume of sales rose 21.5 percent in the September 2009 quarter, following a fall of 7.1 percent in the June 2009 quarter. Despite the recent rise, the series remains at a historically low level.

 

The (unadjusted) value of sales rose 14.6 percent in the September 2009 quarter, providing the largest positive contribution to the change in total manufacturing sales. In the June 2009 quarter, this industry had a fall of 10.9 percent. Prices for basic metals, as measured by the producers price index, fell 4.0 percent and 5.7 percent in the June and September 2009 quarters, respectively, following six quarters of rises.

The trend series for both the sales volume and sales value show moderate increases in the latest two quarters following large falls in the previous two quarters.

The volume of finished goods stocks, which is not seasonally adjusted, is down 33.3 percent for the September 2009 quarter compared with the September 2008 quarter. The value, at $166 million, is down 29.1 percent. 

Revisions

Amended data received from respondents has resulted in revisions for the following industries:

• meat and dairy product manufacturing (March and June 2009 quarters)
• beverage, malt, and tobacco manufacturing (March and June 2009 quarters)
• petroleum and industrial chemical manufacturing (March 2009 quarter)
• transport equipment manufacturing (June 2009 quarter).

The main changes to sales, purchases, and stocks of finished goods are in the following table.

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 2009 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 2009 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 2009 quarter was 91 percent.

For technical information contact:
John Gudgeon or Ken Smart
Christchurch 03 964 8700
Email: info@stats.govt.nz

Next release ...

Economic Survey of Manufacturing: December 2009 quarter will be released on 8 March 2010