IN TOUCH : Exporters toughing it out

While the Reserve Bank negotiates the tricky double act of dampening both domestic inflation and the irrepressible Kiwi dollar, exporters are increasingly having to ‘tough out’ our fluctuating forex fortunes.
If the latest DHL Export Barometer is anything to go by, it seems they’ve decided to don rhino hides and just get on with business in the best way possible. The annual barometer of exporter opinion which was released last month shows that 63 percent of exporters anticipate an increase in their export orders over the next 12 months – though smaller proportion (42 percent) are optimistic about the next three months.
Exporters also seem prepared to “meet exchange rate and other pressures head on” over the next 12 months, notes DHL with three out of four exporters in the 350-strong survey group planning investment compared to just two out of five in 2006. More than half are planning to put money into technology, plant and equipment while 47 percent plan bigger R&D spend and 46 percent plan to take on extra staff.
Those in the agriculture/food and beverage industry are more optimistic short term than any of the other sectors despite nearly quarter admitting to reservations about the strong dollar.
More than half of those surveyed are anticipating an increase in profitability over the next year (a drop of 11 percent compared to 2006 figures) with Australia regarded as the most profitable market. It also remains our biggest market destination (attracting 72 percent of exporters) followed by North America (51 percent). Exporters to Europe, China and South Asia anticipate the biggest increases in orders over the next 12 months.
While worries about exchange rates still rate highly – 72 percent of the sample reported being negatively affected by exchange rates over the past 12 months, that is down on the 2006 high of 82 percent and suggests exporters are developing greater resilience toward forex fluctuations, says DHL general manager NZ Derek Anderson.
“It might be the topic uppermost in their minds but they’re taking action to combat its effects.”
The survey was carried out by ACA Research and involved 350 exporters. Seventy-four percent have been exporting for more than 10 years.

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