Market information

Market information

 

Key indicators, 2015

2015 inflation rate: 0.1%

France’s ranking as trading partner: 24th for exports / 11th for imports

FDI: NZD 102.445 billion in 2014

2015 Corruption Perceptions Index:  4/168 (see the map of corruption perceptions here)

Economic landscape of the country

Despite its geographical isolation and small market, New Zealand boasts one of the most open markets in the world. This is the result of major structural reforms and a successful integration into the global economy.

The primary sector continues to play a leading role in the country’s economy, accounting for more than half of its exports. Alongside this is international tourism which makes a sizeable contribution to the New Zealand economy, representing almost 17% of the country’s exports.

At the same time, with its bustling economy and 4.5 million inhabitants, the New Zealand market is a main economic player in the Asia-Pacific region.

GDP share of the main sectors of activity: 
   Agriculture: 7.5% 
   Industry: 25.5% 
   Services: 64.5%

Trends in the economy

Since the natural disasters that struck a few years ago, particularly with the partial destruction of Christchurch, the country’s second-largest city, New Zealand has seen its national currency, the New Zealand dollar (NZD), rise in strength, in turn increasing the cost of living. This is notably due to strong inflation up to 2010 (more than 4% at the time) which dropped back to 2% in 2011 following the government’s economic moves.

Today, New Zealand also stands out as an ideal place for starting businesses. In 2015, it was ranked number one in the world for being the easiest place to start a business, according to Doing Business.

However, since the earthquake that struck the Christchurch region on 22 February 2011, net migration has been negative: between February 2011 and February 2012 the number leaving New Zealand long-term increased by 18%, while arrivals increased only 1%. This didn’t stop the tourism industry from returning to its pre-February 2011 figures, recording an increase in tourism numbers of 2% in June 2012.

French-New Zealand trade

Since 2010, trade between the two countries has continued to grow. In fact, New Zealand imports of French products in 2014 were more than double those in 2010, while its exports to France decreased.  As such, New Zealand now has a high trade deficit vis-à-vis France. This is due to the fact that New Zealand’s main exports to France are primary sector products whose prices dropped sharply in 2011 and also that its imports are mainly high-cost machinery, notably for the aeronautics sector. However, 2014 saw a 7.3% increase in exports of New Zealand products to France compared to 2013.

Despite being 20,000 km away from New Zealand, France is New Zealand’s 15th largest trade partner.

Top 4 growth sectors

The 4 main income-generating sectors in New Zealand are (from biggest to smallest): food processing, tourism, the digital economy and the maritime industry.

1 Food processing

The food processing sector accounts for 50% of New Zealand exports, making it a key component of the national economy. The sector is primarily based on 3 pillars: dairy products, meat products and wine-growing. Dairy products alone contribute to half of this sector’s exports, led by Fonterra, the world’s largest dairy exporter and New Zealand’s biggest company.  Meat products hold a comparable position in exports with almost NZD 8 billion earned internationally. Wine-growing clearly hasn’t yet reached the levels of these two sectors, but for the last 20 years has enjoyed total annual average growth of 24% resulting in NZD 2 billion of turnover for the industry.   

2 Tourism

Tourism is the 2nd most profitable sector of activity in New Zealand. In 2011, 2.6 million visitors came to these shores, up 2% compared to the previous year. Over the year March 2014 to March 2015, the tourism sector generated almost NZD 2.5 billion in revenue, 10% more than the previous year and accounting for 4.9% of the country’s GDP, at the same time providing direct and indirect jobs to 296,000 people. 

3 Digital economy

In 2005, New Zealand launched a long-term reform for its digital economy through to 2020. As a result, 2010 saw New Zealand join the top 10 economies most open to digital innovation. Due to its physical isolation, the Internet appears to be the best source of development. The government is investing a lot in developing its infrastructure: between 2008 and 2015 the government earmarked almost NZD 4 billion (2% of New Zealand’s GDP) specifically for infrastructure connected with the digital economy.

4 Maritime industries

The maritime industry makes a sizeable contribution to the national economy, generating turnover of more than NZD 2 billion in 2010. Its presence continues to grow; by 2020, the sector is expected to double its share in exports.  

For more information on this sector analysis of the New Zealand economy, see:

The New Zealand Sectors Report 2014

atlas.media.mit.edu/en/profile/country/nzl/ 

 

5 Tips for any business wanting to deal with New Zealand

Tip 1: Choose a specific method of entry

There are different ways of entering the New Zealand market, and your strategy may require that you use more than one. A diligent choice calls for a rigorous study of the local market and will primarily depend on the product or service you want to introduce.

The direct methods for entering include online selling, setting up a subsidiary or entering a partnership with a representative or distributor. Each option has its advantages and disadvantages and comes with legal and financial aspects that need to be considered. Seek advice from your accountant, lawyer or advisor before making a decision.

Tip 2: Consider using local government agencies for your market research

If you want to get help or obtain more information on the local market, please send us your questions. You can also contact New Zealand government agencies such as New Zealand Trade and Enterprise (NZTE) www.nzte.govt.nz.

Tip 3: Protect your intellectual property

With international markets becoming increasingly competitive, it is important to protect your intellectual property. Effectively managing your intellectual property assets will help you maintain your competitive advantage and generate revenue to help grow your business. You can contact the government’s Intellectual Property Office of New Zealand (IPONZ) www.iponz.govt.nz or specialist private agencies.

Tip 4: Get your visa in order

If you’re looking to combine exceptional lifestyle and business opportunities, a range of different visas are available to you. New Zealand is becoming increasingly appealing for businesspeople and companies with something to contribute to the local economy. To find out more, contact the New Zealand embassy in your country directly or visit the website of the government agency Immigration New Zealand www.immigration.govt.nz.

Tip 5: Think about cultural and language differences

Doing business in New Zealand can present small cultural challenges. For example, the culture and local language (English) could have an impact on your brand name, negotiation techniques or marketing operation. If the local language creates problems for you, consider using the services of an interpreter or translator.

 

 

*Sources : 
http://www.diplomatie.gouv.fr
http://www.oecd-ilibrary.org
http://www.treasury.govt.nz
http://www.stats.govt.nz/

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