Expanding business, expanding export
The latest edition of the Index, New Year, New Growth, has found that almost a third of businesses are in ‘expansion mode’ with 26.6 per cent citing ‘confidence in our business and the economy’ as their reason for upping spend.
This comes as positive news, particularly as 71.2 per cent of businesses in our previous edition, Business Gets Political, expressed concerns with the impact the new change of government would have on their operations and ability to grow.
Agricultural enterprises are bullish about their prospects, with 47.3 per cent expecting to increase their CAPEX budgets by 24.0 per cent. This is in line with the significant export opportunities the sector is enjoying, particularly in the chilled and processed food markets, courtesy of growing demand from our neighbours in the Asia Pacific region. Export of food products can only see positive gains so far.
Businesses in the accommodation and hospitality sectors are also set to invest more, with 57.1 per cent planning CAPEX spending increases, off the back of healthy growth in the tourism sector. Total tourism expenditure was $34.7 billion in the year ending March 2016, up more than 12.0 per cent on the previous year.
Where some industries appear to be thriving, other sectors are not as confident and remain cautious around their spending and asset base. Within the retail sector, only 29.4 per cent of businesses intend to increase their CAPEX spending, the lowest of all the industries mentioned in the Index.
Overall, the picture is one of well-founded confidence, not only in the local and international economy but in transforming their businesses.
Should a revamped Trans-Pacific Partnership (TPP) come to fruition, this could provide a fillip to the economy and revolutionise the way businesses operate across the country.
For more information on business sentiment and acquisitions, download your copy of the latest Equipment Demand Index from our website.
In addition to the Equipment Demand Index, we have released a special technology edition of the Equipment Demand Index – Index Insights: New Zealand and the Industry 4.0 Era, which is now available to download.