doing business, new zealand

New Zealand is an island in the South Pacific Ocean, located southeast of Australia. It includes six main islands. New Zealand ranks as the 77th largest country in the world and is about the same size as the U.S. state of Colorado.

Sometime around 1300 A.D. the Polynesian Maori settled in New Zealand. In 1840, the Maori tribes signed the Treaty of Waitangi making New Zealand a British colony. New Zealand achieved its independence in 1907. Although the country supported the U.K. in both world wars, its participation in most international defense alliances ended in the 1980s.

Manufacturing in New Zealand

Typical manufacturing products made in New Zealand include food and beverages, transportation equipment and machinery, chemicals, rubber, plastics and wood products. According to the government of New Zealand, manufacturing as a whole made up 12 percent of New Zealand’s GDP in 2017, down from 14 percent in 2007. Food and beverages accounted for 32 percent of the manufacturing GDP in 2017.

New Zealand’s workers are highly productive with annual productivity gains that average one percent per year. Manufacturing industry salaries average about 15 percent higher than other industries, but manufacturing workers put in more hours per week than those in other industries. About 20 percent of New Zealand’s workforce is engaged in industry.

Other Important Industries

43 percent of the land in New Zealand is devoted to agriculture, primarily permanent pasture, while 31 percent is forest.

In addition to agriculture, other important industries include forestry, fishing, mining, construction, financial services, real estate services and tourism. Almost 73 percent of the workforce in New Zealand works in the service sector and about 6.6 percent work in agriculture. The entire labor force consists of about 2.655 million people, the 114th largest in the world.

Supply Chain Infrastructure for Manufacturing

Transportation and communication are both strong in New Zealand, helping to ensure a smooth supply chain. Despite its remote location, New Zealand exported an estimated $37.5 billion and imported $35.53 billion in goods in 2017. China, Australia, the U.S. and Japan are its primary trading partners.

Shipping

New Zealand has 39 airports with paved runways. As befits a country surrounded by water, New Zealand has major seaports including Auckland Lyttelton and others. It has 4,128 km of railroad lines, putting the country in the 44th position in the world for rail transport capabilities.

This robust and varied transportation network helps to ensure that New Zealand maintains its world position as number 55 for exports and number 58 for imports.

Workforce

The unemployment rate in New Zealand hovers at around five percent, with 2017 estimates of about 4.9 percent. The workforce is well-educated, with the average worker staying in school until at least the age of 19. The workforce has strong technical capabilities.

Over 75 percent of the population resides on the North island in urban areas including Auckland and Wellington, which is the capital city.

Economy

New Zealand ranks number 127 in the world by population, number 77 by area and number 68 based on its estimated 2017 GDP of $188.6 billion. The workforce is highly productive, with a per capita GDP of $38,900 in 2017, making it the 48th best in the world. The GDP grew about three percent in 2017.

The government of New Zealand focuses on maintaining a strong network of free trade agreements. The country signed the Trans-Pacific Partnership in May 2017, the second country to ratify the treaty.

Political Landscape

New Zealand is governed by a parliamentary democracy under a constitutional monarchy. The country’s legal system is based on British common law and New Zealand accepts International Court of Justice (ICJ) and International Criminal Court (ICCt) jurisdictions for international issues. The country spends a little over one percent of its GDP on military expenditures.

Tax Rules

Taxes equal 36.4 percent of the GDP, putting New Zealand at number 51 in the world. The corporate tax rate is 28 percent, down from 30 percent in 2010. According to the World Bank, New Zealand ranks number one in the world for ease of doing business. It is easy to register property, protect minority investors and obtain construction permits, credit and electricity. Intellectual property protections are strong, making New Zealand a desirable location for manufacturing as well as R&D.

Getting Down to Business

Doing business in New Zealand has its own advantages and challenges. Despite a highly productive labor force, manufacturing’s share of GDP is falling, which can make expanding into new facilities and managing productivity a challenge. QAD Financials solutions can help to reduce the costs of setting up new facilities, and QAD Automation Solutions paired with shop floor control can ensure productivity keeps pace with competitors. QAD is able to adapt to any style of manufacturing and to the needs of all geographic locations.

How would you describe the state of Manufacturing in New Zealand? Learn more about manufacturing and doing business in other great countries around the world.

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