DHL Export Barometer reports increase in exporter confidence

DHL Export Barometer reports increase in exporter confidence due to exciting opportunities offered by new markets and innovation

- 65 per cent of exporters confident that orders will increase in the next 12 months

- Exporters overcoming fluctuating exchange rates by entering new markets, developing new products and improving business processes

- Asia and the Pacific offer growth opportunities now and in the future

- Newer exporters the most confident

-‘Small Office / Home Office’ exporters make use of social media to generate leads

Auckland, 0500 29 October 2015 - New Zealand exporter confidence is up despite the fluctuating Kiwi dollar as exporters focus on growing their businesses with strategies such as entering new markets, developing new products and services, as well as improving businesses processes.

This year, the DHL Export Barometer survey found that 65 per cent of New Zealand exporters are confident that export orders will increase in the next 12 months. This is an increase from 2013 when confidence was at 59 per cent.

The manufacturing sector leads in exporter confidence with 58 per cent of exporters saying export orders have increased in the last 12 months, and 68 per cent are expecting them to increase in the next 12 months. This is followed by the agricultural sector. 57 per cent of exporters said export orders have increased in the last year to August 2015, and 71 per cent expect them to increase in the next year. In the services sector, 43 per cent of exporters said export orders have increased in the last 12 months and 55 per cent expect export orders to increase in the next 12 months.

Newer exporters, who have been exporting for one to five years, are the most optimistic - 85 per cent anticipate an increase in expected orders for the coming 12 months. In comparison, only 61 per cent of exporters that are 21 years or older, anticipate an increase.

“It is encouraging that exporter confidence continues to grow in New Zealand despite fluctuating exchange rates,” says Gary Edstein, Senior Vice President of DHL Express Oceania. “Our exporters continue to evolve and adapt, and are taking advantage of export opportunities as they arise. It’s interesting to note that the Asia and Pacific markets, particularly China, have provided new opportunities and newer exporters are quick to take advantage of this.”

Challenges facing exporters

Exchange rates were the most identified issue negatively impacting exports over the last 12 months, with 58 per cent of exporters citing this as an issue. This is similar to 2013 when 55 per cent of exporters named it as an issue.

When asked about the biggest obstacles to exporting to new markets, 32 per cent of exporters identified regulatory environments as a barrier. A quarter of exporters (26 per cent) named different business and cultural principles, as well as the strength of competition, as significant barriers to entry.

However rising fuel costs are less of a concern. According to the 2011 DHL Export Barometer, 48 per cent of those surveyed claimed rising fuel costs would negatively impact their export sales. This year, only 21 per cent cited this as a concern.

“Fluctuations in the exchange rate can pose challenges, but on the flipside they can also benefit exporters, depending on the markets they are exporting in to,” says Mr Edstein. “Savvy exporters can use the exchange rate to their advantage.”

Coping with the fluctuating dollar - strategies and innovation

To cope with the fluctuating dollar, 46 per cent of exporters have developed new products/services, 42 per cent have improved business processes, and 41 per cent have entered new markets in the last 12 months.

Around a third of exporters have invested in new sales and marketing approaches (33 per cent) or enhanced their online presence (32 per cent).

Key markets - now and in the future

Australia (75 per cent) and North America (42 per cent) continue to be the largest export destinations overall. This is consistent with 2013, where Australia was an export destination to 81 per cent of respondents and North America was at 50 per cent.

China has become a more popular export market, with 35 per cent of exporters now exporting there compared to 31 per cent in 2013. The Middle East is also on the rise at 17 per cent, up from 13 per cent in 2013.

Looking to the future, the top export destinations in the next five years are predicted to continue to be Australia and North America, with 67 per cent and 41 per cent of exporters anticipating exporting there in future.

Exporters forecast the Pacific to be a noteworthy area of growth, with 32 per cent predicting this to be a significant export market in five years’ time compared to 23 per cent in 2014.

Exporters look to the Chinese market

Newer exporters, whose businesses have been exporting for fewer than five years, are leveraging on the strong Chinese economy, with 24 per cent of those businesses currently exporting to the Chinese market. Australia remains their strongest market with 70 per cent exporting there, followed by North America (41 per cent) and Europe (27 per cent).

For those exporting for more than five years, Australia (75 per cent), North America (42 per cent), the Pacific (37 per cent) and Europe (35 per cent) were the most identified markets. 35 per cent exported to China.

Similarly Hong Kong is also recognized as a growing market, with 18 per cent identifying this as an area of growth up from 8 per cent in 2014.

“In the Chinese market, we are seeing exports are particularly strong in pharmaceutical products, machinery and electronics,” says Mr Edstein.

‘Small Office / Home Office’ businesses and social media

Over a quarter (27 per cent) of ‘Small Office / Home Office’ exporters (1-4 employees) are using Facebook to generate orders, compared to only 15 per cent of small businesses (5-19 employees), 14 per cent of medium sized businesses (20-99 employees) and 13 per cent of large businesses (100+ employees).

The majority of companies surveyed across the board (72 per cent) are generating export sales from online orders, including 18 per cent of exporters who generate 50 per cent or more of their export orders online.

ENDS

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