‘Manufacturers see glimmer of hope’

Press, 2 August 1983, Page 24

‘Manufacturers see glimmer of hope’

The National Bank reports a “glimmer of hope” among manufacturers for future prospects, but warned that retailers were holding to a cautious outlook.

In its June economic review, the bank said that the most significant development in recent months had been a slow but steady improvement in new order levels in the manufacturing sector.

Manufacturers consulted by bank branches throughout the country experienced a further but slight improvement in order levels in June, despite turnover during the last 3 months being static, the bank said.

“This improvement has lifted expectations marginally and this, when interpreted with the results of the April and May surveys,

would suggest that business confidence has commenced a slow climb out of the trough. “Respondents’ cautious approach to the future has yet to be dispelled, however, as evidenced by their investment intentions. There is clearly a long way to go before this slight improvement in expectations can be translated into any general concensus for recovery.” In a review of the retail sector, the bank said confidence had been running at a relatively low level and this continued in June.

“The majority of respondents expect sales to barely keep abreast of inflation and the general concensus is for little change in the current situation over the year ahead.

“The desire to reduce stock was still being ex-

pressed by about one third of respondents. It is apparent that many consider it prudent to operate with the lowest level of stock possible, as, in the present economic climate, it could prove costly to be caught with any excess.” The bank said that during the past 6 months surveys had indicated that investment intentions had been mainly confined to maintenance.

“Respondents continue to be cautious in their medium term outlook and consequently most do not expect to alter their already limited investment plans.” Dealing with the farming industry, the bank reported concern growing among dairy fanners at the effect of world stockpiles on their industry. Short-term confidence had improved among beef and sheep producers.