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Source: MIL-OSI Submissions

Source: BusinessNZ

● Focus shift to individual business margins with the level of the NZ dollar no longer the running for the top barrier
● Despite a 35% decrease in orders for some businesses, 66% of respondents didn’t feel a negative impact on their export business in 2020
● Australia dominates NZ exports with 82% of respondents sending goods across the ditch
● Over 51% of exporters have changed and adapted business models amidst a global pandemic
The 2020 ExportNZ DHL Export Barometer released today, finds the number one barrier to exporting is the high cost and lower frequency of transport options to get products to market, which is largely due to the impact of Covid-19 on supply chains around the world. The dramatic reduction in commercial air passenger travel has increased the cost of airfreight and forced more exports onto ships, ultimately impacting supply chains globally.
According to the research conducted among more than 270 New Zealand exporters, top barriers to doing business have changed substantially from previous years, with the costs of logistics and transport shooting into the top spot, followed closely by Covid-19 and the general costs of doing business. What is promising, is after being in the top three major barriers for the last five years running, Kiwi exporters’ concern around the ‘level of the NZ dollar’ has dropped significantly to the 7th major barrier. This probably says less about the level of the dollar and more about the increase in other barriers such as transport costs.
When looking into the impact that Covid-19 has had on NZ exporters, most were on the positive side of the ledger, with two thirds (66%) of respondents surveyed noting that they didn’t feel a negative impact on their export opportunities as a result of Covid-19 and furthermore, whilst NZ exporters are cautious, over 84% of respondents are not expecting a decrease in business orders in 2021. However, there was no denying a dip in export orders compared with 2019, as it was about double the normal amount that experienced a decrease in export orders (35% vs 15% in 2019). Whilst Kiwi exporters are still more cautious than ever before, it’s promising to see in spite of it all, they continue to remain relatively optimistic for the year ahead.
This year’s ExportNZ DHL Export Barometer results also highlight that there have been some substantial changes in the way that New Zealand businesses work. Kiwi businesses are thinking hard about their supply chain reliability with 33% of respondents saying they were trying to reduce their reliance on other markets by creating more products locally. In spite of this, exporters are being careful to maintain their competitiveness and not invest too heavily on business costs when they are already struggling with increased transportation and other Covid related costs.
Selina Deadman, Vice President Commercial, DHL Express NZ, says, “We are not out of the woods just yet, and this year’s ExportNZ DHL Export Barometer results highlight that, but it is great to see that Kiwi exporters remain optimistic for the coming year. Within an ever-changing global marketplace, Kiwi businesses will continue to create, innovate and adapt at a substantial rate, to continue to bring great Kiwi products fueled by ingenuity, to the world.”
Catherine Beard, Executive Director of ExportNZ, says, “It’s positive to see that Kiwi exporters are adapting to an ever changing world, and it is good to see the Government continues to focus on securing new Free Trade Agreements and more help from NZTE in overseas markets, as this is what exporters are telling us they want right now.
Challenges ahead and what is next for exporters
Driving Digital Change
Pre-Covid, only three-quarters (71%) of businesses surveyed had a digital presence, however like many businesses around the world, Covid-19 forced many Kiwi businesses into the digital world to keep sales going. For the first time in five years, increasing and enhancing an online presence for NZ Exporters, has overtaken product development.
Having more faith in social media to drive sales
Of those that do generate orders from online platforms, over half of respondents (61%) said they had an increase in online orders this year, and they also confirmed that leads and sales from Facebook had grown substantially with only 6.6% of respondents in 2019 seeing it as a strong sales channel, versus 30.9% in 2020.
While there is an increase in the number of NZ exporters enhancing their online presence and taking advantage of the internet to general orders, the 2020 ExportNZ DHL Export Barometer indicates that some businesses are still yet to catch onto the digital trend, with 35% of respondents saying they spend 0% of their marketing budget online.
Leaning on the government for their support, more than ever before Despite slight increases in exporting to the top four global destinations, Kiwis are relying on the government to support their businesses even more. While NZ exporters agreed in 2019 that attending trade shows would have been a key way the NZ Government could assist business growth, over half of the respondents (51%) agree that travel restrictions have stopped them going to trade shows for new business opportunities. Regarding long-term government support, 30% noted ‘more free trade agreements’ and 29% noted ‘more help from NZTE in overseas markets’; both initiatives seeing a 7% increase in importance when compared to 2019 results. It’s positive to see that exporters are seeing the value of good market access where their goods and services can enter on a competitive basis with other imports.
Australia will continue to be our ally There were no changes to the positions of the top four exporting destinations, with Australia once again securing it’s number one position, followed by North America (USA, Canada, Mexico), Europe and the UK. The report highlighted that in 2021 Kiwi exporters expect little change within the top ten favoured destinations with Australia continuing to dominate NZ exports with 82% of survey respondents sending goods across the ditch, a 4% increase from 78% in 2019. While some of the top products remain consistent each year – fruit, seafood, honey – there is a wide variety of niche products being exported to Australia, such as weaving looms, possum insoles and electric unicycle parts. Other new, but not so surprising, additions for 2020 include hand sanitizer, healthcare supplements and medical devices.
About the ExportNZ DHL Export Barometer
A joint initiative between ExportNZ and DHL, a total of 278 New Zealand exporters were surveyed for the ExportNZ DHL Export Barometer 2020. The ExportNZ DHL Export Barometer is an initiative aimed at analysing export confidence in New Zealand and identifying export trends. It is based on nationwide research, examining the business outlook of Kiwi exporters, highlighting changes in overseas market demand and providing insights into the factors impacting on New Zealand’s export trade.
The key industry segments targeted are: Manufacturing (38%), Online Retail (16.5%), Agriculture, Forestry or Fishing (11%), Professional Scientific & Technical Equipment (10%) and Transport & Storage (3%).
While the majority of respondents comprise businesses that have been exporting for more than 20 years (35%), 27% have been exporting for five years or less. Just over one-fifth (25%) have been exporting for 11-20 years and 13% have been exporting for 6-10 years.