Autumn has seen some dramatic, and not so dramatic changes to New Zealand business. We’re going to highlight some of the main changes we’ve seen this month in this article for you, and break down what it might mean long term. We’ll also look a little deeper into recent events that have evoked a massive need for change, and how it affects businesses in New Zealand. Let’s dive in.
Change in legislation
By now, everyone has seen the horrific news out of the South Island of New Zealand. On Friday, 15 March, a gunman shot and murdered 50 people in Christchurch mosques, with dozens more injured. This awful news led to swift action by the NZ Prime Minister, Jacinda Ardern, who called for gun reform immediately.
But why are we talking about gun reform in a business article? Because it will affect the way businesses run going forward, specifically any arms dealers. The main changes that the Prime Minister is going for is tightening regulations on what types of guns can be purchased. She also has talked about reducing the number of firearms owned in the country, which will affect current gun consumers.
If these possible regulations are passed, any businesses selling guns will need to swiftly change their sales and promotions. For example, if semi-automatic weapons were to be banned, gun sellers would need to change their brochure printing and any promotional wobblers promoting these types of guns, immediately. More in depth, business would need to change their ordering systems to remove any illegal weapons and ammunition, and also change their processes for in-store buyers. Many purchasers use a company website to purchase guns online, so any online marketing would also need to be updated.
In addition to the upcoming changes in legislation, many small businesses were devastatingly affected by this shooting. This article reports that up to 30 businesses were affected by the incident, due to many of the victims and victim’s families being small business owners. This month in Christchurch business will be heavily focussed on supporting these businesses and their families.
Economic growth worries
The New Zealand Consumer Confidence scale reflects how confident consumers are in NZ’s economy, and is calculated from a short series of questions that ask things like what their attitude was to large purchases, and what their current financial circumstances are. Over the past two years or so, this Consumer Confidence level has decreased steadily, which is a bit of a concern for the economy.
What this could mean is that the economy was due to slow down, especially as consumers consume less, or don’t have the option to consume at the moment. One extreme example of this is the current housing market in Auckland, New Zealand. The housing issue in NZ in general is both one of availability (not enough houses on the market for those looking to buy), and extremely high prices, both of which are compounded in Auckland.
A big reason that people aren’t able to afford these high prices is because the cost of living has ever increased, making the gap between what people can afford and what is actually out there, even wider. Even simple things like day to day groceries or stationary and binding supplies for small businesses have increased in cost. Besides the day to day items, the simple issue of supply and demand for the housing market is a massive issue as well. There aren’t enough houses on the market for those who are looking to buy, and houses are often sold by auction on the day they’re put up.
On the other side of the coin, however, some sources have shown the housing market is finally going down in overall price lately. This article states that average house prices have dropped a small amount at the end of 2018. Some of the reasons for this has been the current government’s new restrictions on foreign buyers, which has been a big reason for the housing shortage in the first place. Click here for more information about these restrictions. In addition to possibly bettering house prices, higher cost of living can mean higher wages as well, as companies will need to keep up with cost of living. This can mean a slightly larger budget for some Kiwis.
The big takeaway from these trends and numbers is that there is a slight trend of a cooling economy in New Zealand, but there are many factors that contribute to this, and it doesn’t necessarily translate to an economic recession any time soon. In addition, measures that the government has put in place to work on the housing issue seem to be working, and we may start seeing a real difference.
Dairy on the up and up
Who would have thought that the cows would come to our rescue? But, it’s true. Dairy prices are much higher than they’ve been since a fairly deep low last Spring 2018. Why is this important for anyone not in commercial agriculture? Because dairy contributes a massive amount to New Zealand’s overall GDP (Gross domestic product).
Despite being a small country, New Zealand is the 8th world’s largest milk producer, which is pretty impressive. This also means that poor financial times in the dairy industry pretty strongly affects the overall economy for the country. Here are some more interesting facts on the dairy industry in New Zealand if you are interested.
In addition to dairy exports making up a large percentage of NZ’s economy, small dairy businesses, like local farms and dairy producing plants make up a big part of NZ’s workforce. When dairy prices do well, it also affects the local businesses and how much they make off of their production.
That about wraps up this month in New Zealand business, and we hope you’ve learned something about the state of NZ’s economy these days. If you’d like to do what you can to help the victims of the Christchurch terror attack, here is some information on how to do so.