NZ export expectations highest recorded in six years

NZ export expectations highest recorded in six years

2 November 2016

Despite a major dip in export prospects throughout Asia Pacific’s developed economies earlier this year, the latest Grant Thornton International Business Report (IBR) reveals that export expectations have now shot up throughout the region from 15% in Q2 2016 to 21% in Q3 2016 – the highest quarterly figure ever recorded.

New Zealand’s export expectations more than doubled from 22% in Q2 2016 to 48% in Q3 2016 and is the most positive response from businesses surveyed since 2011. This also puts New Zealand at number one in a league table of 37 countries surveyed.

Australia (28% in Q2 to 38% in Q3) and Singapore (-6% to 6%) have also recorded healthy increases, while in Japan the figure has increased from 12% to 16% - again the highest quarterly figure for export expectations ever recorded.

Paul Kane, Partner, Privately Held Business at Grant Thornton New Zealand says, “Export hopes among businesses in Asia Pacific’s developed nations are higher now than we’ve recorded in any previous quarter. Despite uncertainty across the wider global economy, these firms are looking overseas with enthusiasm. It suggests a bounce in expectations since the Trans Pacific Partnership was signed in February, despite the threat of it stalling.

“But these export figures also provide encouraging evidence that in many economies, reliance on China as a trading partner is reducing. China will undoubtedly remain an important export destination for many, but not to the same extent as in previous years.”

The IBR reveals that although businesses in developed APAC economies are more expectant when it comes to exports, overall economic optimism paints a different picture. Business optimism in emerging APAC nations has fallen 8% in Q3 2016 but still sits at 42%. In developed APAC nations, optimism has increased 12% but is much lower overall at -8%.

New Zealand business optimism has remained stable at 76% since the beginning of the year and sits in fourth place out of 37 countries surveyed

Kane says, “Optimism in Asia Pacific is travelling in different directions this quarter when split between emerging and developed economies. However, the fact is that emerging nations are still much more optimistic. Most of the ASEAN nations fall into this category and their higher optimism levels are evidence that the ASEAN Economic Community, established in 2015, is creating a belief that greater cooperation between businesses in these countries will become a reality.

“The outlook for Asia as a whole is mixed, but opportunities exist for the most dynamic businesses to make the most of trade flows both domestically and overseas. New partnerships and agreements will open new doors, but firms must be ready to capitalise.”

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Notes to editors

The Grant Thornton International Business Report (IBR)

The Grant Thornton International Business Report (IBR), launched in 1992 initially in nine European countries, now provides insight into the views and expectations of more than 10,000 businesses per year across 37 economies.

Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. Fieldwork is undertaken on a quarterly basis, primarily by telephone. IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with more than 2,600 chief executive officers, managing directors, chairmen or other senior executives from all industry sectors conducted in July to September 2016.

About Grant Thornton International Ltd*

Grant Thornton is one of the world's leading organisations of independent assurance, tax and advisory firms. These firms help dynamic organisations unlock their potential for growth by providing meaningful, actionable advice through a broad range of services. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to solve complex issues for privately owned, publicly listed and public sector clients. Over 38,500 Grant Thornton people, across 120 countries, are focused on making a difference to clients, colleagues and the communities in which we live and work.

Grant Thornton International is a non-practicing, international umbrella entity organised as a private company limited by guarantee incorporated in England and Wales. References to "Grant Thornton" are to the brand under which the Grant Thornton member firms operate and refer to one or more member firms, as the context requires. Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered independently by member firms, which are not responsible for the services or activities of one another. Grant Thornton International does not provide services to clients.

*All references to Grant Thornton International in the press release and this “Notes to editor” section are to Grant Thornton International Ltd. Grant Thornton International Ltd is a non-practicing, international umbrella entity organized as a private company limited by guarantee incorporated in England and Wales.

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