The rapidly declining number of New Zealanders migrating to Australia is backed by soaring business confidence on this side of the Tasman compared with the “lucky country”, according to a recent Grant Thornton International Business Report (IBR).
Not only does the survey show New Zealand business confidence levels are nearly three times higher than Australia’s, at 64% compared with 23%, but in other key areas such as employment, profitability and exporting our neighbours across the ditch also lag well behind.
Of the 45 countries surveyed New Zealand ranks sixth in confidence at 64%, behind Philippines 96%, United Arab Emirates 84%, Denmark 76%, United Kingdom 76% and Peru 74%. Australia is in 26th position with 23%.
Simon Carey, partner at Grant Thornton New Zealand, said that according to Statistics New Zealand, the seasonally adjusted net loss of 1,100 migrants to Australia in August 2013 was the smallest net loss since November 2009 (also1,100).
“Net losses to Australia have fallen consistently since December 2012 (3,300), mainly due to fewer New Zealand citizens moving to Australia. These figures are reflected in the widening gap in business confidence between the two countries.
“New Zealand was also ahead of Australia in intentions to employ, 42% and 9th in the world, compared with 21% and 23rd,” he said.
New Zealand’s third quarter figures grew in strength against the rest of the world, particularly in profitability where it ranked 3rd in the world (Australia ranked 23rd). In a poll of economic uncertainty, New Zealand is ranked at the bottom of the table (14%) reflecting that our business owners are the most certain in the world about the economic horizon, with Australia at 42% and in 20th position.
“While New Zealanders are continually looking to trump Australia in most things, especially sport, a strong Australian economy is actually good for New Zealand. Yes, it does increase the level of net migration out of New Zealand, but Australia remains our biggest trading partner, albeit just ahead of China, and any strength in their economy flows through to New Zealand,” he said.
The big international mover in the last quarter was the United Kingdom where business optimism shot up from net 34% in Q2 to 76% in Q3. This is the highest figure ever recorded for the United Kingdom in 22 years of IBR research, and makes its business community the third most optimistic in the 45-economy survey.
“The good news for New Zealand exporters is that in the last 12 months United Kingdom confidence has increased 88% and the United States 33%, with China also on the climb again.
“These figures are reflected in export confidence where New Zealand is ranked 9th with 28% expecting growth in this area compared with 18% last quarter. Australia is languishing in 33rd position.
“New Zealand businesses need to be wary of the continued lack of skilled workers. Fifty per cent of businesses cite this as a worry which is an increase of almost 50% in one quarter and the fourth highest ranking in the survey.
“And this is only likely to get worse in the short term with some economists picking the economy to grow by 4% next year, coupled with a strengthening Australian economy which will put pressure on our net migration figures,” says Carey.
Simon Carey
Grant Thornton Partner, Privately Held Business
T +64 3 3 964 6812
M +64 (0)21 665 708
E simon.carey@nz.gt.com