26 Mar 2013

Ageing population will hit manufacturing firms - report

8:42 am on 26 March 2013

The effect of an ageing population is expected to hit the manufacturing sector hardest, a report predicts.

The Institute of Economic Research has considered the implications of the ageing population on business and profits.

Its report says demand will shift in favour of goods and services used by older people but costs are expected to rise due to competition for fewer skilled workers.

It says companies need to make sure they have the right recruitment and retention policies to ensure skills held by retiring workers are not lost.

The institute estimates the loss of jobs in manufacturing will continue, particularly in labour intensive industries like textiles and clothing.

But the economic think tank is not ringing the death knell for the sector, saying New Zealand firms are likely to shift to niche manufacturing, where its hard for lower cost foreign firms to replicate the goods produced.

Meanwhile, consumers are expected to pay more for haircuts and healthcare.