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Better profitability and orders but barriers remain

Exporters - better profitability and orders but barriers remain

Catherine Beard, Executive Director for ExportNZ says the annual ExportNZ survey shows exporters are feeling confident, expecting increasing profitability and rising orders in the next twelve months, but nearly half the respondents are facing tariff and non-tariff trade barriers.

“Two key differences in this year’s survey from 2014 – are China and ASEAN moving up the ranks of countries that respondents are exporting to, and an increase in the use of on-line selling to open up new market opportunities (52.2% said yes to this question compared to only 37.9% in 2014).

“In the next 12 months the majority (70%) of respondents said they expected business profitability to improve, 22% stay the same and 6.8% to deteriorate. Most (54.6%) expected their business to employ more people with 38.5% employing the same and only a small number reducing staff (6.8%).

“While the majority (68.8%) are able to access enough skilled staff to grow their business, it is concerning that 31% said this is a constraint,” Catherine Beard said.

In the next year most expected their orders across all markets to increase, either slowly (48.5%) or substantially (31.6%). The strongest average sales growth was expected in North America (20%).

The top export destinations for the respondents have changed slightly from 2014 with China and ASEAN moving up the rankings. Most exporters are focusing on Australia, China (incl. HK) Europe (incl. UK), ASEAN and North America. The ASEAN market was most mentioned as the next new market to enter followed by China.

Top obstacles to growth were price competitiveness of products, which has moved ahead of exchange rate levels as an issue, followed by funding for developing overseas markets and overseas regulatory requirements.

Regulatory and non-tariff barriers are a problem for nearly half the respondents (41.8%) and ExportNZ will be raising these issues with Government Officials.

“In terms of Government assistance, those who get help from NZTE (51.2%) rate it highly. But around 40% are not getting any assistance and would like market development help from NZTE. This was the most popular selection, followed by R & D assistance and attending trade shows.

“The exporters that are facing trade barriers cite a number of difficulties. China is mentioned often and continues to be a challenging market to do business in. Exporters in the food and beverage category need more help from Ministry of Primary Industries to navigate market access issues as this is holding back trade, particularly in the processed food category.

“ExportNZ will collate the feedback on tariff and non-tariff barriers and work with officials to help reduce them.”

ENDS

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