Business Monitor International


New Zealand Business Forecast Report

Published 24 September 2014

  • 47 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
New Zealand Business Forecast Report

Core Views

  • New Zealand's economic performance remains on a stable trend, with indicators showing that the manufacturing and services sectors remain firmly in expansion. We maintain that the pace of expansion will remain broadly the same as 2013, with just a slight acceleration to 2.7% in 2014 from 2.5% previously. Interest rate hikes, together with export performance moderating in Q314, should cap upside potential of the economic growth.

  • While we had originally held the view that the Reserve Bank of New Zealand (RBNZ) will hold its official policy rate at 2.75%, intensifying price pressures and strong economic indicators have led us to revise up our rate forecast to expect another 25 basis points. This would bring our forecast for the official cash rate to hit 3.00% by end-2014. Accordingly, we maintain that the next rate hike will be largely pre-emptive in nature, in response to cool domestic price pressures that have been on the rise. On the other hand, the subdued, though growing, credit expansion from business suggests to us that the central bank will be wary about impeding business expansion, and possibly re-focus on cooling the housing market through its macro-prudential rules. Indeed, we believe that the macro-prudential rules have shown signs of have their intended effect on housing market.

  • Volatile weather and a trend of increasing compliance/regulations will continue to pose risks to New Zealand exports, given the changing composition of its trade with the external world. While dairy exports have surged of late, we believe this is unsustainable, driven mainly by Chinese importers fearing a possible lack of supply as new regulations are set to be implemented in March. Taking a longer term view of things, we believe that the trade balance will record a surplus and continue to head in the right direction as the interest rate hike by the RBNZ to help rein in import consumption, and reduce external liabilities in the banking sector as housing-related...

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
New Coalition Partners May Weaken National's Policy-Making Abilities
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
9
Stability To Prevail, But Not Without Challenges
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Moderate Growth Ahead
14
table: Economic Activity
14
Fiscal Policy
16
Weaker Revenue Growth To Slow Fiscal Consolidation
16
table: Fiscal Policy
16
Monetary Policy
17
RBNZ To Keep A Tight Rein On House Prices
17
table: Monetary Policy
18
Balance Of Payments
19
NZD: Bearish Case Still Dominates Despite Rate Hikes
19
table: Current Account
19
Chapter 3: 10-Year Forecast
23
The New Zealand Economy To 2023
23
Deleveraging Will Weigh On Growth
23
table: Long-Term Macroeconomic Forecasts
23
Chapter 4: Business Environment
25
SWOT Analysis
25
BMI Business Environment Risk Ratings
25
Business Environment Outlook
26
Institutions
26
Table: BMI Business & Operation Risk Ratings
26
Infrastructure
27
Table: BMI Legal Framework Rating
27
Table: Labour Force Quality
28
Market Orientation
29
Table: Trade And Investment Ratings
29
TABLE: ASIA - ANNUAL FDI INFLOWS
30
Operational Risk
31
TABLE: TOP EXPORT DESTINATIONS
31
Chapter 5: Key Sectors
33
Agribusiness
33
table: Butter Production & Consumption
34
table: Milk Production & Consumption
34
table: Milk Production & Consumption, 2013-2018
34
Table: Cheese Production & Consumption
35
table: Whole Milk Powder Production & Consumption, 2013-2018
35
table: Milk Production & Consumption
35
Tourism
36
table: New Zealand Whole Milk Powder Production & Consumption, 2008-2013
36
table: Cheese Production & Consumption (New Zealand 2008-2013)
36
table: Butter Production & Consumption
36
table: New Zealand Inbound Tourism, 2011-2018
37
Other Key Sectors
43
table: Pharma Sector Key Indicators
43
table: Telecoms Sector Key Indicators
43
TABLE: New Zealand Infrastructure Sector Key Indicators
43
Chapter 6: BMI Global Assumptions
45
Global Outlook
45
Emerging Market Deceleration
45
Table: Global Assumptions
45
Table: Developed States, Real GDP GrowtH, %
46
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
46
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
46
Table: Emerging Markets, Real GDP Growth, %
47

The New Zealand Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in New Zealand and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of New Zealand's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of New Zealand's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise New Zealand's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in New Zealand, including currency volatility, the commodity price boom and protectionist policies.

The New Zealand Business Forecast Report by Business Monitor International (BMI) includes three major sections: Economic Outlook, Political Outlook and Business Environment.

Economic Outlook:

How will the New Zealand economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for New Zealand through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The New Zealand Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for New Zealand and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on New Zealand, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in New Zealand over the next 5-years?

BMI's New Zealand country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the New Zealand Market - Political Strengths, Weaknesses, Opportunities and Threats facing New Zealand.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for New Zealand's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark New Zealand's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for New Zealand, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of New Zealand's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express