Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ CEOs shrug off wider business blues in latest KPMG survey

By Rebecca Howard

Aug. 6 (BusinessDesk) - New Zealand chief executives seem more upbeat in KPMG's latest CEO Outlook Survey Report than respondents in other recent business surveys that are showing sentiment souring as firms fret over the Labour-led government.

KPMG NZ chief executive Godfrey Boyce said the survey pointed to a "slight softening" in confidence but he didn't view this "as a faltering of confidence – but more of a realistic re-balancing". Given that New Zealand has come through a period of robust growth, "a little tempering of confidence is both realistic and expected," he said.

He did note, however, bedding in a new government with new policies "inevitably brings a level of uncertainty."

In contrast, the ANZ business outlook last week showed confidence at a 10-year low, an outcome latched onto by the government's critics as a warning against intrusive regulation.

According to the KPMG annual survey of 50 New Zealand chief executives, 64 percent expressed confidence in New Zealand’s growth outlook for the next three years, compared to 74 percent 12 months ago.

New Zealand CEOs’ expectations of growth within their own organisations also reduced since the last survey, with most now forecasting less than 2 percent revenue growth over the next three years versus 86 percent expecting more than 2 percent top line growth in the prior survey.

According to the report, CEOs see rising global protectionism as the greatest threat to growth and have regressed on digital transformation.

The past year has seen “global vagaries continuing to play out with a return to territorialism in response to Brexit and the US government’s protectionist trade direction," said Boyce.

A total of 68 percent identified a return to territorialism as the greatest threat to their organisation’s growth. New Zealand's reliance on export-led growth may underpin that nervousness, particularly if a trade war between the US and China breaks out, said Boyce.

"Barriers to trade raise the costs of export and damage competitiveness. This can impact grower returns and undermine growth, with knock-on effects on jobs and regional economies," Zespri International chief executive Dan Mathieson told the KPMG survey.

Among other things "compared to their global cohort, and their own responses from a year ago, New Zealand leaders have lost confidence in their organisations to deliver digital transformation," according to the report.

Only 28 percent of those surveyed were confident they were disrupting their sector rather than waiting to be disrupted. That number is sharply lower than the 88 percent who were confident a year earlier.

A little more than half of New Zealand CEOs - 58 percent - are “personally prepared to lead their organisation through a radical transformation of its operating model to maintain competitiveness" compared to a global metric of 71 percent. Also, only 26 percent are “confident that existing leadership is fully equipped to oversee the transformation" compared to a global response of 44 percent.

According to the survey, 98 percent of those surveyed see digital transformation as a challenge rather than a threat but 64 percent said their organisation is struggling to keep pace with change, versus a global 36 percent.

Boyce said other key risks to growth are cybersecurity and environmental/climate change. Only 32 percent of surveyed chief executives see their organisations as well placed overall to withstand a cyber attack, when compared to their global counterparts, at just over 50 percent.

The 2018 KPMG New Zealand CEO Outlook Survey is run in conjunction with a KPMG Global survey of 1,300 CEOs across 52 countries. Of the 50 surveyed in New Zealand, half were in organisations where the most recent fiscal year returned revenue of more than US$1 billion.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Real Estate: Foreign Buyers Ban Passes Third Reading

The Bill to put in place the Government’s policy of banning overseas buyers of existing homes has passed its third and final reading in the House. More>>


Nine Merger: Fairfax Slashes Value Of NZ Business

Fairfax Media Group more than halved the value of its Kiwi assets, attaching just A$40 million to mastheads that were once the core of a billion dollar investment. More>>

Collecting Scalpers: Commerce Commission To Sue Viagogo

The Commission will claim that Viagogo made false or misleading representations: • that it was an “official” seller, when it was not • that tickets were limited or about to sell out • that consumers were “guaranteed” to receive valid tickets for their event • about the price of tickets... More>>


Price Of Cheese: Fonterra CEO Goes Early After Milk Price Trimmed

Aug. 15 (BusinessDesk) - Fonterra Cooperative Group chief executive Theo Spierings is leaving the role early after the world's biggest dairy exporter lowered its farmgate payout and trimmed its dividend to retain cash. More>>