Expanding export markets remain a key focus for New Zealand businesses in 2018, as overseas demand for kiwi produce continues to grow. As a result, 42.8 per cent of businesses plan to increase their capital expenditure budgets over the next 12 months, according to the Maia Financial New Zealand Equipment Demand Index (the Index).
Businesses planning to increase their capex expect to spend an additional 22.0 per cent on average; a figure which indicates significant positive sentiment about the economic outlook, locally and internationally which sees many focusing on export.
It’s helped that newly elected Prime Minister Jacinda Ardern has thrown her support behind a revised free trade agreement, which is expected to open new markets in Japan, Mexico, Peru and Canada, and level the playing field for Kiwi businesses in Asia Pacific and the EU. A revised agreement would be particularly important for manufacturers and those in agriculture considering the high demand for kiwi produce and help increase the ability for manufacturers to contend with their overseas competitors.
New Zealand’s economy has been a stellar performer of late among OECD nations and that looks set to continue, with a forecast of growth in excess of 3.0 per cent in 2018-19. By contrast, Australia is forecast to experience growth of 2.92 per cent over the same period.