DHL Export Barometer – New Zealand Tops Destination For Australian Exporters: Strategy

Confident exporters predict New Zealand market will keep growing

By Michelle Hammond
Friday, 10 August 2012

New Zealand has replaced the United Kingdom as the predicted third biggest export destination for Australian exporters in five years’ time, according to the 2012 DHL Export Barometer.


The ninth annual barometer surveyed nearly 800 small, medium and large companies across industries including mining, manufacturing, agriculture, food and professional services.


In spite of a high exchange rate and the carbon tax, the barometer shows confidence among Australian exporters has bounced back after a significant dip in 2011.


According to the barometer, this is the result of a range of business strategies including exporting to new markets, product and service innovation, and growing orders from existing destinations.


Almost 60% of exporters expect to increase their export orders in 2012, up from 48% last year, while 50% expect company profitability to increase in the next 12 months, up from 41% in 2011.


Half of the companies surveyed said the strong dollar is reducing their ability to compete against overseas businesses. However, only 16% said they would consider moving production offshore.


Instead, innovation and product refinement were identified as top strategies to manage the strong Australian dollar.


Interestingly, New Zealand has emerged as an important market for Australian exporters, topping the list of current export destinations (50% this year compared to 39% last year).


New Zealand has also replaced the UK as the third biggest export destination predicted in five years’ time (34%).


Gary Edstein, senior vice president of DHL Express Oceania, isn’t surprised by these findings.


“New Zealand has always been an uncomplicated trading opportunity for Australians, with many using it as a testing ground… before launching into larger export markets,” he says.


“What is interesting this year is that more exporters are seeing New Zealand as a source of future growth, perhaps due to an unstable and challenging global market.”


An increasing number of Australian businesses have turned their attention to New Zealand in recent months, including Nanotek, StyleTread and Cafe2U, just to name a few.


Michael Fox, co-founder of Sydney-based online shoe store Shoes of Prey, which has also expanded to New Zealand, told StartupSmart in May that New Zealand is an ideal testing market.


“It has a western population and is a relatively small size. New Zealand is not as connected to people elsewhere in the world, which makes it a good testing country,” he said.


While China and India remain other key markets for exporters, Indonesia and the Middle East have grown in significance, topping the list of nations identified as the biggest growth markets.


University of New South Wales economist Professor Tim Harcourt, a former Austrade economist and author of the DHL Export Barometer survey series, told Sky News 72% of exporters are now importers as well.


This compares with a historical average of around 45%.


“The general media sentiment that there is one group in the economy called exporters and another called importers is nonsense,” he said.

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