2 Aug 2013

Rapid dollar rise takes manufacturers by surprise

9:55 am on 2 August 2013

The Employers and Manufacturers Association says the pace of the soaring New Zealand dollar against the Australian has taken some manufacturers by surprise.

The kiwi has risen nearly 10 cents against the Australian since the middle of March, while falling several cents against the US dollar.

The association says some manufacturers who sell their product to Australia are already hurting.

It says manufactured exports across the Tasman fell 4% for the 12 months to the end of June to $6.1 billion, excluding dairy, meat and wood pulp.

Association chief executive Kim Campbell says the rise of the kiwi has remarkably quick and it will take some time to filter through the sector.

Mr Campbell says for a long time Australia has been New Zealand's largest market for manufactured exports and he doesn't know how destructive the fast rising kiwi will be for them.

"One of the things that I do know is that because of the global meltdown a few years ago and all of the pain that we went through in getting ourselves to be more resilient - the manufacturers that are still there are a lot stronger than they were."

Mr Campbell says he's optimistic that although some manufacturers will find the situation very difficult, most will find their way through it.

He says the answer to managing currency volatility is to diversify into new markets and invest in better equipment, skills development and innovation.