It's been a big 18 months for many Kiwi exporters and while the Covid-19 pandemic has put significant pressure on global supply chains and caused disruption to international trade globally, New Zealand's exports have remained a pocket of strength for the domestic economy.
In fact, New Zealand's annual exports continue to hover not far off record highs, pushing $60 billion.
Against expectations of a protracted downturn, the ongoing resilience of the primary sector has helped support the broader New Zealand economy through the pandemic. In fact, the ASB Commodities Index (a weighted index of New Zealand's major commodity exports) hit its highest monthly averages ever in March, April and May this year, and the ASB Economics team is forecasting a solid $7.90kgms milk price for the 2021/2022 season.
Based on this, it's not surprising to see regions with a high reliance on agriculture and horticulture generally performing better than others.
In the three months to March 2021, rural regions largely outperformed the major urban centres on ASB's Regional Economic Scoreboard, which tracks a range of economic indicators across the country. Hawke's Bay came in at number two on the scoreboard for the second consecutive quarter.
On the ground, we know Hawke's Bay has been facing challenges set by immigration constraints, labour shortages and global shipping disruption which has led to supply chain congestion. Encouragingly, and despite the challenges, our economists think there could be further upside for Hawke's Bay and Gisborne ahead.
With hospitality restrictions easing in some countries, demand for local food and beverage exports is likely to grow, bolstering the industry which has already been performing well given our border is closed to the majority of international tourists.
While it certainly hasn't been the 18 months we thought we were in for, the strides made in international trade by local businesses have been a silver lining. Speaking with some of our export clients, many agreed that while the past year presented challenges for their businesses, the New Zealand Inc brand continued to be an important differentiator, providing confidence to the market around provenance and food safety.
We were proud to support the local ExportNZ ASB Hawke's Bay Export Awards once again, recognising the region's most successful and innovative exporting businesses. And what a year it's been for many of the Bay's key export industries.
Wine exports are holding up well despite the ongoing restrictions overseas, fruit exports are up around $30 million annually and forestry exports have bounced back from last year's lows to lift by more than $1b in the 12 months to June. Unsurprisingly, in light of those facts, there were a record number of high-calibre entries for 2021 - a reflection of the local innovative spirit.
While the art of doing business offshore is currently more complex than usual, the rapid advance of digital technology is bringing transformational change in this space.
Our people are working with the Digital Council for Aotearoa to consider how digital tools could become more widely embraced by the Kiwi trade community.
In tomorrow's commercial world, trade will continue to be of paramount importance to New Zealand's economic prosperity. Let's all do our part in supporting importers and exporters to focus on their operations and ultimately boost New Zealand's economy.
• Nigel Annett is ASB's executive general manager for corporate banking