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New Zealand exporters have been finding it tough, but despite fluctuating exchange rates and rising fuel costs, they are still cautiously optimistic about the next 12 months according to the 2012 DHL Export Barometer.
The annual survey of New Zealand exporters found that only 51% of exporters are confident about an increase in export orders in the next 12 months. This is significantly lower compared to 2011, when 70% of exporters where confident in growth. 
This result is the lowest in the history of the DHL Export Barometer, which has been running in New Zealand since 2004. 
“There’s no denying business conditions for exporters have been challenging. While the survey result is lower than previous years and indicates difficult trading conditions in the first part of the year, there’s still some optimism going forward. Half of exporters anticipate growth in the next 12 months,” says Tim Baxter, Country Manager, DHL Express New Zealand.
“New Zealand businesses are nimble and innovative, and there are still many companies that are doing well. By re-thinking business models and adapting to the conditions these companies continue to make headway,” says Tim Baxter.
Within this dip in confidence, exporters in agriculture have been leading other sectors and 60% of exporters stated an increase in orders over the last 12 months. 
Exporters in agriculture will continue to cautiously lead other sectors for the next 12 months with Services and Manufacturing exporters closely following the upward trend. However exporters in the tourism sector do not foresee any increase.
“We’ve been fortunate to have exports of agricultural products remain strong through this uncertain period.  Farmers are less optimistic going forward so it’s promising to see the Service and Manufacturing sectors looking more confident than they were 12 months ago,” says Baxter.
Negative factors
According to the survey, the top three negative factors impacting exporter’s business sales in the last 12 months were, exchange rates (58%) and rising fuel costs (46%). 
Regarding the third, interestingly 31% of exporters cited economic/political conditions abroad, the cost of raw materials and international competition as third equal factors negatively impacting sales for the last 12 months. 
“There are numerous factors contributing to difficult exporting conditions. In a complex economic environment such as the one we’re in now, there’s not going to be a single fix to make it better,” says Baxter.
As well as being top export destinations, Australia and China are considered the greatest competitive threat to New Zealand exporters.
Fifty-one per cent of exporters perceive Australia and China as a threat, with China seen as highly competitive to those in manufacturing specifically. 
“It is understandable how China can be perceived as an opportunity and a threat. China represents a tremendous opportunity for New Zealand exporters, but it’s a big exporter itself, therefore competing with New Zealand in other export markets.
“The response towards Australia is more curious. Australia produces some similar commodities to New Zealand and is obviously a close neighbour. It may be because there is increased economic uncertainty, that potential competition is being felt more keenly,” says Baxter.
Free Trade Agreement’s and the importance of Asia 
Despite the perceived threat of China as an international competitor, 62% of exporters consider the current Free Trade Agreement (FTA) with China to be positive. This closely follows the exporter’s most popular FTA with Australia, which sees the majority, (67%) of exporters seeing it as a positive. 
Australia continues to be the top current export destination, followed by North America, Europe, China and UK. This is the second year in a row that China has appeared in the top five export destinations. 
The majority of exporters (59%) expect orders to China to increase in the next 12 months. However around one fifth of exporters (22%) expect their orders from the UK to decrease over the next 12 months. 
“There will only be one transition as big as China in our lifetime,” says Baxter. “With 4 billion people and 60% of the world’s population, we are seeing a meteoric trade shift. This is borne out in the survey results that Asia, led by China, is where the growth opportunities lie. 
“The Asian region is experiencing significant investment by governments and multi-nationals. Economic trading barriers are being reduced and New Zealand exporters need to take advantage of this ” says Baxter
Our export opportunity is online
Over the last 12 months over half (57%) the exporters have increased the level of online commerce in their business and almost three quarters (74%) of all exporters found this has had a positive impact on their business. 
However there still exists the division between those who are taking advantage of the online environment and those who aren’t. Twenty per cent (20%) of exporters still have no online presence at all. 
Sixty-one per cent of export businesses provide product/service information online to generate export opportunities, particularly large export businesses.
“As a growth channel, exporters can do more to increase their sales via online. The online environment provides a cost effective way to break down barriers to access markets. Coupled with the rise of an Asian middle class with an appetite for New Zealand consumer goods, the online environment presents a significant export channel,” says Baxter.
Glenn Baker

Glenn is a professional writer/editor with 50-plus years’ experience across radio, television and magazine publishing.


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