3 Apr 2015

Export drop rattles companies

12:39 pm on 3 April 2015

Confidence among manufacturers and exporters has taken a hit with export sales in February down 27 percent compared with a year ago.

Container ship, Napier.

Photo: 123RF

A survey found net confidence - which includes measures of cash flow, profitability, investment, staff and sales - fell into negative territory for the first time since April 2013. Net confidence was minus 13, down from 21 in January.

The sample of Manufacturers and Exporters Association members covered companies with combined annual sales of $178 million, with 68 percent of those from exports.

Association president Tom Thomson said currency volality was the biggest issue for exporters, with the big jump in the US dollar forcing up the price of some raw materials.

"We've been caught a little bit like a possum in the headlights," said Mr Thomson.

"We've not only got weakening against the US dollar but we're also seeing a huge strengthening against the Australian dollar.

"We've definitely got a double whammy effect going on at the moment."

Mr Thomson said exporters to Europe and Asia were experiencing similar problems.

Demand from China had yet to bounce back after the Chinese New Year.

Mr Thomson said big swings in exchange rates were challenging, but manufacturers were "resilient" and he was confident they would adapt.

Domestic sales improved year on year for the third month in a row, up 10 percent on February 2014.

Get the RNZ app

for ad-free news and current affairs