Battling the slowdown: Component-maker upbeat but challenges lie ahead

Murray Fenton feels good about what lies ahead for Adept, the Auckland plastic component maker he founded in 1970.

"I have confidence in the future and I know a lot of my customers do. Yet if you look around you say 'Well, nothing points to that - why do we feel that we're going to be all right?"'

But his positive outlook is in line with yesterday's GDP figures, which show the manufacturing sector grew 0.8 per cent in the June quarter - its second quarter of growth after four quarters of contraction.

Adept employs more than 100 people making industrial plastic components, with about 90 per cent of production exported either directly or by its customers.

Bruce Goldsworthy of the Employers & Manufacturers Association Northern says the volatility of the exchange rate is the major factor facing the sector.

A sudden shift in the exchange rate can dramatically affect what manufacturers invoice at the end of a month, he says.

Manufacturing exports have been rising over the past year, says Goldsworthy, but that could change because of the strong rise in the New Zealand dollar over the past three months.

"I'm afraid that what we might see in September is that could drop back again."

With the economy softening most manufacturers looking for growth are eyeing overseas markets - a prospect made more difficult by a high exchange rate, he says.

Fenton says finding the right skilled staff is the biggest challenge facing Adept.

"We have reached the stage where we are spending quite a lot of time and money on education [and] training - including right down to literacy and numeracy."