Exporters now more 'innovative'

RICHARD MEADOWS
Last updated 05:00 18/06/2013
Survey shows businesses are confident that export orders would pick up in the next 12 months.
Fairfax NZ

SHIPPING OUT: Survey shows businesses are confident that export orders would pick up in the next 12 months.

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Exporters feeling the pressure of a high exchange rate are adapting rather than being "held to ransom" by factors outside their control, a new survey shows.

The ninth annual DHL Export Barometer found that the resilient export sector has bounced back from last year's all-time confidence low.

Fifty-nine per cent of the 277 businesses surveyed were confident export orders would pick up in the next 12 months, compared with last year's 51 per cent.

That was despite the challenges presented by the persistently high exchange rate, which more than half of exporters identified as their biggest bugbear.

The New Zealand dollar has pulled back from peaks above US85 cents in recent weeks, but is still trading around the historically high US80c mark.

On the flipside, cheaper imports meant more exporters were getting a good deal on the cost of raw materials.

DHL Express New Zealand country manager Tim Baxter said the survivors of the manufacturing exodus 10 years ago tended to be very innovative.

"Overall we're seeing exporters adopt strategies that focus on what they can control, as opposed to being held to ransom by external factors that they can't control," he said.

Nine out of 10 businesses said they had initiated new strategies to drive growth over the last year.

Baxter also pointed to the internet as a major driver of change, with 40 per cent of exporters beefing up their online presence.

The main reported benefits in doing so were marketing to overseas customers, better customer service and faster delivery speed.

Half the businesses online were also using number-crunching analytics to help understand their customers' behaviour.

Baxter said exporters' online operations were often the fastest growing and most profitable parts of their business, with low barriers to entry.

"If you're an online retailer that is reasonably small, effectively you can get an export market without having to apply bricks and mortar."

Independently owned Iversen Publishing promotes and sells its products and provides professional development through its website.

Managing director Sandra Iversen said buoyant export orders meant her firm had employed new office staff, and was expecting to hire more sales and production workers.

The company recently set up a United States office to carve out a foothold in the North American market. At least a third of businesses in the DHL survey were also entering new markets, while a quarter were investigating an expansion.

Australia cemented its title as the top export destination, with 81 per cent of companies sending products across the Tasman.

While China was not in the top five, three quarters of those surveyed expected an increase in demand over the next 12 months.

Baxter said it was encouraging that exporters had the world's fastest growing economy in their sights.

"With 1.3 billion people and a burgeoning consumer middle class, there will only be one transition as big as China in our lifetime."

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- BusinessDay.co.nz

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