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

  • The free trade agreement (FTA) between New Zealand and South Korea is set to be ratified by Q115, subject to parliamentary approval, and will provide significant benefits to New Zealand's meat and dairy exports. Additionally, recued import tariffs on consumer gods should support real incomes, helping to offset the impact of weakening terms of trade and a depreciating currency.

  • We are beginning to see signs of a slight slowdown in the New Zealand economy. The crucial agricultural sector is cooling, while the services and construction sectors are currently the only drivers of growth, leaving the economy susceptible to weakness in the New Zealand dollar and the property market.

  • Our contrarian view of a no further interest rate hikes by the Reserve Bank of New Zealand (RBNZ) until 2016 is gaining credence as consensus expectations continue to gradually decline while interest rate markets price out aggressive hikes. As real GDP growth weakens, and macro-prudential housing measures remain in place, inflationary pressures will remain benign.

  • The New Zealand government is set to run a small fiscal deficit in Fiscal Year 2014/15, but the overall trends of narrower deficits and falling spending relative to GDP remain in place. We are forecasting a deficit equivalent to 0.2% of GDP in FY2014/15, before flipping to a surplus of 0.3% of GDP in FY2015/16.

  • We forecast the NZD to average USD0.7400/NZD in 2015 and USD0.7000/NZD in 2016. The recent low of USD0.7700/NZD is a key technical support level, and a break below this would suggest a move down to USD0.7000/NZD and possibly below. Fundamentally, the Reserve Bank of New Zealand continues to talk down the currency, and widespread expectations of interest rate hikes are gradually being unwound, which will act as headwinds to the currency going forward.

Major Forecast Changes

  • We have not made any significant revisions since our previous Business forecast Report. We continue to see real GDP growth...

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 Alliances To Weigh On Policymaking Ability
New Alliances To Weigh On Policymaking Ability
Table: Political overview
8
Long-Term Political Outlook
9
Stability To Prevail, But Not Without Challenges
Stability To Prevail, But Not Without Challenges
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Growth Boost To Prove Temporary Despite Support From Fiscal Reform
Growth Boost To Prove Temporary Despite Support From Fiscal Reform
Table: Economic Activity
14
Fiscal Policy
15
Fiscal Position To Remain Enviable
Fiscal Position To Remain Enviable
Table: Fiscal Policy
15
Monetary Policy
17
RBNZ To Remain On Hold For An Extended Period
RBNZ To Remain On Hold For An Extended Period
Table: Monetary Policy
17
Exchange Rate Policy
19
NZD: Falling Real Rates To Expose Overvaluation
NZD: Falling Real Rates To Expose Overvaluation
Table: CURENCY FORECAST
19
Tab le: Exchang e Rat e
20
Balance Of Payments
21
Dairy Exports Slump Right On Cue
Dairy Exports Slump Right On Cue
Table: Current Account
21
Chapter 3: 10-Year Forecast
23
The New Zealand Economy To 2023
23
Deleveraging Will Weigh On Growth
Deleveraging Will Weigh On Growth
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
Tab le: BMI Busin ess & Operation Risk Ratings
26
Infrastructure
27
Tab le: BMI Lega l Fram ework Rating
27
Table: Labour Force Quality
28
Market Orientation
29
Table: Trade And Investment Ratings
29
TABLE: ASIA - ANUAL FDI INFLOWS
30
Operational Risk
31
TABLE: TOP EXPORT DESTINATIONS
31
Chapter 5: Key Sectors
33
Pharmaceuticals & Healthcare
33
Table: Pharmaceutical Sales, Historical Data And Forecasts
34
Table: Healthcare Expenditure Trends , Historical Data And Forecasts
34
Table: Government Healthcare Expenditure Trends , Historical Data And Forecasts
34
Table: Private Healthcare Expenditure Trends , Historical Data And Forecasts
34
Tourism
35
Table: Inbound Tourism
37
Table: Outbound Tourism
38
Other Key Sectors
41
Tab le: Telecoms Sector Key Indicators
41
Tab le: Infrastructur e Sector Key Indicators
41
Tab le: Food and Drink Sector Key Indicators
41
Chapter 6: BMI Global Assumptions
43
Global Outlook
43
Eurozone Downgrade On Poor Q214
43
Table: Global Assumptions
43
Table: Developed States, Real GDP Growth, %
44
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
44
Table: Emerging Markets , Real GDP Growth , %
45

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