Despite a major dip in export prospects throughout Asia Pacific’s developed economies earlier this year, the latest Grant Thornton International Business Report (IBR) reveals that export expectations have now shot up throughout the region from 15% in Q2 2016 to 21% in Q3 2016 – the highest quarterly figure ever recorded.
New Zealand’s export expectations more than doubled from 22% in Q2 2016 to 48% in Q3 2016 and is the most positive response from businesses surveyed since 2011. This also puts New Zealand at number one in a league table of 37 countries surveyed.
Australia (28% in Q2 to 38% in Q3) and Singapore (-6% to 6%) have also recorded healthy increases, while in Japan the figure has increased from 12% to 16% - again the highest quarterly figure for export expectations ever recorded.
Paul Kane, Partner, Privately Held Business at Grant Thornton New Zealand says, “Export hopes among businesses in Asia Pacific’s developed nations are higher now than we’ve recorded in any previous quarter. Despite uncertainty across the wider global economy, these firms are looking overseas with enthusiasm. It suggests a bounce in expectations since the Trans Pacific Partnership was signed in February, despite the threat of it stalling.
“But these export figures also provide encouraging evidence that in many economies, reliance on China as a trading partner is reducing. China will undoubtedly remain an important export destination for many, but not to the same extent as in previous years.”
The IBR reveals that although businesses in developed APAC economies are more expectant when it comes to exports, overall economic optimism paints a different picture. Business optimism in emerging APAC nations has fallen 8% in Q3 2016 but still sits at 42%. In developed APAC nations, optimism has increased 12% but is much lower overall at -8%.
New Zealand business optimism has remained stable at 76% since the beginning of the year and sits in fourth place out of 37 countries surveyed
Kane says, “Optimism in Asia Pacific is travelling in different directions this quarter when split between emerging and developed economies. However, the fact is that emerging nations are still much more optimistic. Most of the ASEAN nations fall into this category and their higher optimism levels are evidence that the ASEAN Economic Community, established in 2015, is creating a belief that greater cooperation between businesses in these countries will become a reality.
“The outlook for Asia as a whole is mixed, but opportunities exist for the most dynamic businesses to make the most of trade flows both domestically and overseas. New partnerships and agreements will open new doors, but firms must be ready to capitalise.”