New Zealand’s global competitiveness has improved two notches to 23rd in the long-running World Economic Forum survey of official data and 14,059 senior executives around the globe, including 55 New Zealand business leaders.
Released locally by the New Zealand Initiative, a pro-business think tank, the 2012-13 version of the Global Competitiveness Report includes the impact on 2011 government debt and deficit figures of the Christchurch earthquakes.
The relative improvement in competitiveness would have been greater, had New Zealand not dropped to 124th in a survey of 144 countries for ratios of government debt to gross domestic product.
Australia maintained its 2011-12 report ranking of 20th. . .
Australia has weathered the worst of the global financial crisis on the back of mining.
But demand for minerals is dropping and Australia’s economic growth is slowing:
. . . There are more signs of trouble ahead. Retail sales slumped to a near two-year low in July, for example, while job-market indicators have shown a softening in demand for new staff as Australia’s manufacturing sector continues to contract.
“Things have moved on significantly, with the global outlook weakening further and weaker bulk commodity prices clouding the outlook for the Australian economy significantly,” said Justin Fabo, a senior economist at ANZ Bank.
For Australia, the outlook for growth in China, the country’s largest trading partner, will be key.
“A lot of it hinges on China,” said Paul Sheard, chief global economist at Standard & Poor’s Ratings Services. “So long as China goes through a soft landing, I think this will be more of an adjustment phase for Australia.” . . .
Australia is our biggest export market, where it’s economy goes ours will almost certainly follow.
Both of us have been insulated from the worst of the global financial woes by growing demand from China.
We can also be thankful for our association with APEC:
Economic disruption, including possible recession in the United States, the Eurozone crisis and the slowing of expansion in China have taken a toll on the confidence of CEOs in the Asia-Pacific region, according to PwC’s 2012 APEC CEO Survey.
Just 36% of executives surveyed by PwC said they are “very confident” of business growth over the next 12 months. Longer term, however, prospects improve, with more than half (54%) expressing a high level of confidence for the next three to five years.
PwC New Zealand’s Chief Executive Bruce Hassall is not surprised by the results and says the confidence gap underlines the challenges for businesses operating today, verses the promise of growth tomorrow in the Asia-Pacific. . .
. . . “And looming large on the horizon is the overall trend of rising incomes and the fact consumer spending power among APEC economies is projected to nearly double through 2021. That creates an enormous opportunity for New Zealand,” says Mr Hassall. . .
We can’t ignore our traditional markets in Europe and the USA but the newer markets in Asia will provide more opportunities for trade at least in the short to medium term.