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Supply Chain Risk

Manufacturers face supply chain delays

Manufacturers are facing a critical situation with shipping supply chains, Otago Southland Employers’ Association chief executive Virginia Nicholls says.

Shipping services were facing congestion in ports, and there were issues with space availability on ships, she said.

Some shipping lines had cancelled services and some were skipping some New Zealand ports. Manufacturers were also facing increased freight costs, including international airfreight and shipping costs.

Overall activity in Otago and Southland’s manufacturing sector for October was 50.2 points, which was down on the previous month. A PMI reading above 50 indicates manufacturing is generally expanding and below 50 that it is declining.

The regional breakdown by categories showed new orders and deliveries of raw materials at 53.3 and production levels and stocks of finished products at the same level. Employment levels were below 50.

The construction industry was busy and struggling to get skilled labour. Some food manufacturers supplying the local hospitality sector were experiencing reduced sales as a result of Covid 19, she said.

Significant efforts to fill horticulture and viticulture vacancies had not had much success.

‘‘It is very difficult to get the right skills in the right place at the right time. These roles have previously been filled by a skilled migrant workforce, including the recognised seasonal employer [RSE] workers. Without the workers to pick the fruit, some crops will remain on the trees, and jobs in the long term will be lost,’’ she said.

Immigration policy was integral to easing critical skills gaps, and manufacturers were looking for a plan how to safely access the global talent it needed to work alongside the domestic labour supply.

Manufacturers were also seeking a risk-based approach to operate safely in the event of any further outbreaks of Covid-19.

 

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