Export Activity Remains Strong

Export Activity Remains Strong Despite World Economic Uncertainties

New Zealand exporters expect sales to remain strong in the coming quarter despite continuing uncertainty about world economic conditions.

The latest NZIER Quarterly Manufacturing Exporters Survey commissioned by Trade New Zealand shows a net 24% of manufacturing and building exporters expect an increase in export sales in the next three months. That compares with 12% of firms that were expecting export sales to increase in the June quarter survey.

Export activity was strong in the September quarter with export sales exceeding expectations. A net 28% of manufacturers and building exporters reported a rise in export sales in the September quarter. This compares to a net 13% of firms expecting higher export sales in that quarter and net 7% of firms reporting an increase in export sales in the previous quarter.

The positive prediction for the next quarter comes despite continuing uncertainty around the prospects for world economic growth and volatility on world sharemarkets hampering business optimism. A net 10% of manufacturing and building exporters expect general business conditions to deteriorate over the next six months.

The persistence of a building boom in Australia and the positive outlook for the Australian economy continues to help our manufactured exports.

Trade New Zealand's Senior Trade Commissioner to Australia John Nicholson says building and construction is one of the growth engines for Australia with a lot of activity that New Zealand companies can participate in.

“You can split the sector into residential and commercial/industrial. Both sectors use a lot of New Zealand inputs. Although the residential market is going into a bit of a slowdown, there is increasing investment in infrastructure, mining and minerals, so there’ll be a lot more new building and construction activity in those areas.”

“We are also seeing increasing retail sales of New Zealand wine, growing supermarket interest in new and innovative products from New Zealand and greater publicity for the new wave of kiwi fashion designers who are making waves on this side of the Tasman.”

Exporters and non-exporters reported an increase in output during the September quarter. Increases in output were most widespread among exporting firms, reflecting increases in sales both in New Zealand and overseas. A net 37% of exporters expect output to increase over the next three months.

Profitability lifted in both exporters and non-exporters during the September quarter. Exporting and non-exporting firms expect profitability to increase over the next three months. A net 19% percent of exporting firms expect an increase in profitability over the next three months.

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