Despite a slight softening of export orders in 2019, and concerns about the Kiwi dollar and staying competitive in the face of increasing industrial relations costs, Kiwi exporters still have positive expectations for 2020.
The Export Barometer conducted by ExportNZ and DHL each year is always a good indicator of the state of New Zealand’s export sector, and the confidence of the nation’s trading companies. This year’s survey, conducted among more than 400 exporters, revealed an optimism towards 2020 activity, yet caution around the international marketplace.
The key takeaways are that 50 percent of exporters have seen international orders increase over 2019, and more than half are optimistic that orders will increase in 2020. The cost of exporting is a major concern – however, there have been some positive environmental changes, with 49 percent of exporters surveyed having implemented sustainable initiatives in 2019.
DHL Express New Zealand country manager Mark Foy is pleased to see exporting confidence above last year’s level and that trade war concerns are not as much of a barrier as in 2018.
“This suggests that New Zealand exporters have experienced the effects of the threat of a trade war for more than 12 months. The results suggest that it hasn’t impacted them and they are more confident now that it’s not going to have a significant impact – which will potentially lead to more opportunities coming off the back of it.”
Foy says 2019 was the first year they had surveyed exporters about their sustainable initiatives – which range from biodegradable packaging waste management to electric vehicle fleets.
DHL Express New Zealand has been busy too – recently launching its first fleet of electric delivery vehicles in New Zealand. And this year, more than 170 customers signed up for its GoGreen Carbon Neutral service, which allows them to opt for an environmentally responsible shipping option and helps combat climate change by offsetting emissions throughout the transportation of shipments.
Planning for a sustainable future is just one of a number of challenges facing New Zealand exporters going forward. There are concerns about the New Zealand dollar – with 38 percent citing this as a major concern – up 13 percent from 2018.
There’s also apprehension around increasing costs associated with coming industrial regulation.
Government support is high on the wish-list for many exporters. Twenty-nine percent of those surveyed agree that attending trade shows with other Kiwi companies is a strategic way for the government to support international business growth.
A further 25 percent believe more help with non-tariff barriers is needed.
For 2020 Foy predicts continuing growth in online shopping, which will impact significantly on the volume of New Zealand exports.
“For international markets Australia still remains the top exporting destination from New Zealand. The Barometer this year also saw a dramatic increase into other major markets – such as North America and Europe – which is very interesting.”
He noted a six percent increase in exports to North America from 41 percent in 2018 to 47 percent in 2019.
Plenty of positives, and a general feeling of cautious optimism – that pretty much sums up the export outlook for the year ahead.
Written by Glenn Baker. This article first appeared in the December 2019 issue of NZBusiness magazine
