General region overview
The relationship between New Zealand and Australia continues to be the largest 'two-way' trading partnership we may see this enhanced as a result of the increasing constraints on international markets further away. Our close proximity and time zones, ability to manage borders as island nations and cultural similarities, could provide both markets a number of opportunities in the future.
In Australia, economic activity has continued, despite social distancing restrictions and border closures. All businesses deemed essential remain open, with infrastructure, construction, food retail, engineering, manufacturing, technology and defence industries operating (albeit with social distancing or working from home measures).
From a community perspective, Australia's federal, state and territory governments are gradually easing restrictions around public gatherings, how businesses can operate, and travel across regions. The National Cabinet has released a 3-step plan to create a COVIDSafe Australia with new ways of living and working. Read more about the 3-step plan here.
Australia moved rapidly to set in place economic stimulus packages to manage the impacts of COVID-19, at a business and household level. These have been presented at both a national and state level.
Across the Pacific, the way countries are managing and regulating COVID-19 differs significantly. In business, it is taking longer to get things done. Transport links and delivering products to market have become key concerns and challenges.
Top Level Insights: July 2020
On the whole, Australia has been largely successful containing disease spread while keeping large sections of the economy ticking over, however there has been a recent resurgence of COVID-19 in Victoria, with stricter controls in place for parts of the state.
Significant Government stimulus packages have been implemented, with unemployment currently sitting at 7%.
Australia’s economic performance is forecast to drop -3% in GDP this year, with a return to +5.3% next year.
There is a strong desire for a Trans-Tasman Travel Bubble, however dates remain speculative. A travel bubble would accelerate business but we expect business travellers to remain cautious for the time being.
With the exception of tourism and food service, most New Zealand companies continue to trade, with the Australia market remaining relatively stable.
With an increase in online retail, navigating and building capability in e-commerce is one of the fastest growing customer requests.
There are key opportunities for New Zealand businesses in Defence; with capability build a focus for New Zealand manufacturing and tech.
Mining is Australia’s largest export sector and continues to operate largely unimpeded.
Building, Construction and Infrastructure have kept moving with several large projects underway.
In the sector of Food and Beverage Innovation, retailers have traded well through the crisis.