Canterbury’s exporters are cautiously optimistic about the coming year, with 51% expecting their export orders to increase in the next twelve months, according to the 2024 ExportNZ/DHL Export Barometer Report. This sentiment echoes results in the recent Business Canterbury Quarterly Business Canterbury Survey, where 57% of Canterbury businesses across the board expect their financial performance to improve in the next year.
The report shows the top barriers facing Canterbury exporters include the cost and availability of transport and logistics (56%), high operational costs (48%), and fluctuations in the value of the New Zealand dollar (31%). These hurdles reflect the broader economic landscape that is affecting exporters nationwide.
Business Canterbury Chief Executive Leeann Watson says: “While Canterbury exporters are still hopeful for growth, the cautious outlook stems from the steep rise in business costs across the board over the last few years which is still having an impact on the bottom line. From logistics to currency volatility, we are still in an environment where exporters are forced to be more strategic in how they grow their market presence.”
This follows 78% of Canterbury exporters reporting an increase in total costs compared to this time last year. While this figure is significant, Canterbury businesses are in a slightly better position than the national average, where almost nine out of ten (89%) exporters report rising costs.
In response, exporters report investing more in marketing, enhancing their online presence, adopting new technologies, and expanding their product and service ranges. These investments, while adding to current expenses, are helping to improve efficiency, boost overseas orders, and accelerate product or service development. Additionally, there’s a strong focus on exploring new markets to drive export growth.
“It is encouraging to see the investments businesses are making now, despite being in a high-cost environment, demonstrating a forward-thinking mindset that sets Canterbury exporters apart. Their resilience and commitment to long-term success will position them well for the future. What stands out in these results is a sector that is taking charge and leaning into innovation, and new ways of thinking to navigate the constantly changing economic environment.”
Nationally, the top barriers for exporters continue to be the cost and supply of supply chains and logistics (55%), the high cost of doing business in New Zealand (44%), and the value of the New Zealand dollar (27%).
Vice President, Commercial at DHL New Zealand Selina Deadman says the results are encouraging overall. “We’re still moving into the post-pandemic export industry era. The research highlights that 83% of New Zealand-based exporters are experiencing up to a 49% increase in costs. So while costs remain an issue, it’s comforting to see signs of optimism on the horizon with more than half of these exporters expecting an uptick in overseas orders within the year.
“In another encouraging sign, Kiwi exporters are exploring new strategic avenues to tackle challenges being faced, including developing new products and services, improving processes to drive productivity, and entering new international markets.”.
In the last 12 months, the following markets have been popular for exporters: Australia (77%), US (52%), Continental Europe (46%), the United Kingdom (34%), and China / Hong Kong (38%).
ExportNZ Executive Director Joshua Tan praises the industry’s response to the volatile economic and exporting environment. “The current operating environment is difficult to navigate, with persistent challenges connected with the rising cost of doing business. Despite the many challenges, exporters have expressed optimism and confidence in future growth through the survey, which is very encouraging.
“Given the Government’s goal to double export value within ten years, there are areas where Government support would be valued by exporters – support to help them grow their businesses here in New Zealand and leverage market opportunities overseas. The results from the survey reflect ongoing concerns and potential growth areas that are well known to both the Government and the sector, so now is the time to implement meaningful action.”
Exporters continue to express optimism, despite the current tough economic conditions, and are prepared to meet further challenges over the next year in the hope that cost and delay difficulties ease and the global trading environment improves.
Read more in the 2024 ExportNZ/DHL Export Barometer Report here.
