New Zealand

In-depth country-focused analysis on New Zealand's economic, political and operational risk environment, complemented by detailed sector insight

New Zealand

Our comprehensive assessment of New Zealand's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect New Zealand, as well as the latest industry developments that could impact New Zealand's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in New Zealand before your competitors.

Country Risk

New Zealand Country Risk

New Zealand Industry Coverage (12)

Agribusiness

New Zealand Agribusiness

BMI View:

BMI View: We believe that increased access to international markets, particularly Taiwan and China, will prove to be the prime growth driver for the agribusiness sector in New Zealand over the medium to long term. This will be supportive for both the dairy and the livestock segments. The dairy sector in particular will benefit from export demand growth, as many other countries in Asia are facing growing domestic demand and relatively limited production capacity.

Key Trends

  • Milk production growth to 2018/19: 9.1% to 23.7mn tonnes. Given the small domestic consumption base and the high productivity of the sector, long-term expansion...

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Autos

New Zealand Autos

BMI View:

New Zealand auto sales continue to power ahead, in line with BMI's optimistic stance towards the local sales market. Looking at sales trends for Q115, a total of 33,276 new vehicles were sold in New Zealand, representing an increase of 7.8% year-on-year (y-o-y), according to figures from New Zealand's Motor Industry Association (MIA).

Breaking down the headline figure, there were a total of 13,503 passengers cars sold (-0.7%), 10,469 SUVs (+14.3%), 7,948 LCVs (+15.7%), 1,134 HCVs (2.4%) and 195 'Other' vehicles (+29.1%). These sales figures are very much in line with BMI's view that CV sales will outstrip PC sales over 2015. Considering the month of March, this was the strongest March for new vehicle sales since 1984 according to the MIA.

For 2015, we are targeting sales growth for the overall new vehicle sales market of 6.6%. CV...

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Commercial Banking

New Zealand Commercial Banking

BMI View:

...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Food & Drink

New Zealand Food & Drink

BMI View:

BMI View: We maintain a largely positive outlook for New Zealand's food and drink industry as the stable economic environment, increasing private consumption and improving labour market will sustain healthy sales growth in the food, drink and mass grocery retail sectors over our forecast period to 2019.

Headline Industry Data (local currency)

  • Food consumption value growth (y-o-y) in 2015: +5.3%; compound annual growth rate (CAGR) 2014-2019: +5.8%.

  • Per capita food consumption value growth (y-o-y) in 2015: +4.2%; CAGR 2014-2019: +4.8%.

  • Alcoholic drinks value sales growth (y-o-y) in 2015: +5.4%; CAGR 2014-2019: +6.0. %.

  • Soft drinks value sales growth (y-o-y) in 2015: +7.3%; CAGR 2014-...

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Infrastructure

New Zealand Infrastructure

BMI View:

BMI View: We expect New Zealand's construction sector to experience a growth slowdown in 2015, due primarily to the limited upside potential for housing demand. This however, does not mean the dearth of growth opportunities in the country as there remain several positive drivers for construction activity.

Key Trends And Developments

  • In July 2014, Leighton Contractors, as part of the Wellington Gateway Partnership (WGP), reached financial close for the NZD1bn Transmission Gully Motorway public-private partnership project. WGP will finance, design and build the project, and then operate and maintain the 27km Transmission Gully Motorway from 2020 for a period of 25 years. The contract value to Leighton Contractors is approximately AUD800mn. The project is New...

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Insurance

New Zealand Insurance

BMI View:

BMI View: With private expenditure on the rise, the stable New Zealand economy houses an established Insurance market with scope for growth - particularly in the non-life segment. The life insurance segment still remains slow-moving but may still offer opportunity for new and existing players as a result of this low level of penetration and a new surge of interest in KiwiSaver products.

New Zealand's geographical disposition and vulnerability to natural disasters will remain an important component of the non life segment however soaring property prices and high household debt has meant that although property insurance is an integral component to the sector it will experience moderate growth. To balance this slowdown, BMI's steady outlook on...

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Medical Devices

New Zealand Medical Devices

BMI View:

BMI Industry View: The District Health Boards' focus on cost efficiency and a stronger policy on medical device reimbursement is likely affect the growth prospects of the New Zealand medical device market in 2015 and beyond. The strengthening of the US dollar has already affected import performance from the USA, the country's main supplier, and we expect this trend to continue in the medium term.

Headline Industry Forecasts

  • The market is expected to post steady, if unspectacular, growth in the next few years. BMI estimates the CAGR for 2013-2018 to be 3.7%. This will take the market to USD1,008.0mn by 2018, equal to USD213 per capita. The orthopaedics &...

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Oil & Gas

New Zealand Oil & Gas

BMI View:

BMI View: Over the last quarter, oil and gas activity has mainly been confined to onshore. First production from the Maari growth project will drive an increase in oil production, though over the mid-term decline is inevitable. Long-term hydrocarbon potential remains strong with 18 under-explored sedimentary basins outside of the producing Taranaki basin, though exploration will progress slowly.

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Headline Forecasts (New Zealand 2013-2019)
2013 2014e

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Pharmaceuticals & Healthcare

New Zealand Pharmaceuticals & Healthcare

BMI View:

BMI View : New Zealand will maintain a low-risk and business friendly operating environment, characterised by stable governance and a consistent regulatory agenda. Efforts to increase the uptake of generics and biosimilars will be hampered by the branded drug bias of an aging population who demand access to rising volumes of innovative pharmaceuticals. However, the conversion of these conditions into growth...

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Retail

New Zealand Retail

BMI View:

BMI View: New Zealand possesses a mature retail market , which continues to benefit from a large proportion of mid to high range income households. We believe that with growing levels disposable income the retail market will see greater spending on non-essential items. New Zealand's retail sales volume registered a 1.7% quarter-on-quarter rise in Q414, with spending motor vehicle and parts retailing leading the way. A sturdy economy is set to support continued growth in spending and retail sales figures throughout our forecast period.

New Zealand's economy currently leads the way throughout the developed world, outperforming both neighbouring Australia and the rest of the OECD with last year's growth reaching a respectable 3.3%. We currently expect GDP...

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Telecommunications

New Zealand Telecommunications

BMI View:

BMI View : New Zealand's telecommunications market is small and well-developed but quite mature and suffers from a high degree of saturation, particularly in the voice and basic mobile services markets. The broadband market is somewhat under-developed, which is not surprising given that a large proportion of the population is scattered across difficult terrain; operators have not found it cost-effective to push networks out beyond the principal towns and cities. Two ambitious broadband development programmes are underway and are only just beginning to deliver results. The larger project demanded the separation of the incumbent into discrete service and infrastructure companies, but the government's laudable pursuit of affordability for all is putting the infrastructure business under severe financial pressure and undermines the state's goal of becoming a fibre nation. Meanwhile, 4G mobile broadband...

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Tourism

New Zealand Tourism

BMI View:

BMI View: The New Zealand tourism report looks at a range of key indicators in this developing market, including the expected growth in inbound and outbound travel and the potential for growth in tourism-related expenditure and hotel industry value. Despite its remote location, New Zealand is actively promoting itself on the global tourism stage, and a gradually expanding network of airline connectivity is making the country increasingly accessible for tourists and investors alike.

Australia remains the key source market for tourist visitors to New Zealand - with travel between the two countries benefiting from affordable air travel connections between key cities in both countries. Arrivals from other Asia Pacific countries are increasing rapidly and New Zealand is keen to attract more affluent and high-...

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