Exporter confidence growing despite political uncertainty

2016 has been a good year overall for exporters, the survey says (File)
2016 has been a good year overall for exporters, the survey says (File)

The majority of New Zealand's exporters (63 percent) expect orders to increase in the next 12 months, according to the 2016 Export NZ DHL Export Barometer.  A further 32 percent think their orders will remain at the same level.

Export NZ's executive director Catherine Beard says it's "a positive signal" in what appears to be an increasingly uncertain global market.

"While the survey was conducted before the US election result was known, the chance of TPP getting across the line was looking weak whichever candidate won," she said.

The research also found that 2016 has been a good year overall for exporters, with 52 percent of those surveyed achieving an increase in international orders.

"Export destinations have remained consistent, although China, ASEAN and Hong Kong have slipped back a bit since last year. Now the top five export destinations are Australia, North America, Europe, Pacific Islands and the UK," Ms Beard said.

There are several challenges facing the 536 exporters who were surveyed.

The high New Zealand dollar is a problem for 33 percent of exporters, while the strength of competition was the second most common challenge identified in the survey.

Finding partners or agents in a new destination comes in third, affecting 28 percent of exporters, with set-up costs and funding being a challenge for 23 percent.

For one-in-six exporters, there are no major barriers regarding international trade.

Export NZ says the research found that a quarter of exporters support more free trade agreements.

"Australia is the only country out of our most popular export destinations that currently has a trade deal with New Zealand, so progress needs to be made on the rest, including the UK as a result of Brexit," Ms Beard says.

"Export NZ is hopeful that if the TPP can't come to fruition, the wider Asian region can show the way with a high-quality free trade agreement - RCEP (the Regional Comprehensive Economic Partnership), a 16-country, Asia-wide free trade agreement including India and Japan.

"This would help New Zealand exporters remain competitive in these markets."

The survey also found that while some exporters have embraced online trading, there is room for improvement.

Among the exporters who were surveyed, 73 percent said they were generating orders online.

One-fifth of exporters now generate more than half of their international orders online, including 6 percent who generate all export orders this way.

"Online commerce is a massive growth area for Kiwi companies and almost three-quarters of exporters now generate orders in this way," says Mark Foy, DHL Express's NZ country manager.

"Correspondingly, 40 percent of exporters say they currently use social media to increase international orders. This is an additional opportunity to market to international consumers looking for innovative and unique goods."

The exporters were also asked what they thought of the prospect of the Government lowering the GST threshold for imported goods.

The majority (56 percent) said there would be no impact to their business if the threshold was lowered from $400, but 32 percent said there could be negative impacts from the increased cost of importing raw materials, delays or other administrative costs.

One in 10 believe reducing the GST threshold would make it easier for them to compete with overseas retailers.

The survey also found that exporters think an increase in support from the Government for research and development assistance would be helpful.