Employers' access to international markets to source staff has been a vital safety valve for the economy in prior years. But the talent crunch is a global phenomenon affecting many countries, including Australia, which is poaching staff from New Zealand.
The crunch issues make for a rich cocktail of international gloom. Russia's invasion of Ukraine has resulted in rampant increases in the cost of commodities and energy, supply chain disruptions, and a tightening of financial conditions.
China's zero-Covid policy and the risk of further lockdowns have heightened concerns about supply chain disruptions and further inflationary pressures.
Unsurprisingly, the CEOs rated geopolitical volatility at 7.44/5, tensions between China and the US at 7.38/5, the Russian-Ukraine war at 7.23, supply chain difficulties at 7.13/5, cyber attacks 7.11/5 and rising nationalism at 6.99/5 .
Importantly, New Zealand business has little control in the face of such risks. Mitre 10 chief executive Andrea Scown points out that geopolitical risk is increasingly concerning for New Zealand's importers.
"Foreign policy towards de-globalisation risks undermining decades of improving GDP across many countries," she says. "Managing a polarised workforce of the pandemic and shifting societal values."
A banking chair is concerned that "the combination of a potentially major slowdown in China related to the popping of their property bubble, the pressures caused for Europe by the Ukraine conflict, and increasingly aggressive monetary tightening in almost all major markets points to a major slowdown in global growth".
Off-setting the general gloom is the reality that NZ's agribusiness exports — particularly to China where they have enjoyed beneficial price points — have held up well. Food and fibre export revenue reached a record $53.3 billion in the year to June 30, 2022, particularly due to a strong performance from meat and dairy.
Said Vector chair Jonathan Mason — also a director of Air New Zealand and Zespri — the NZ primary sector and tourism position us to outperform global growth."
"The global economic outlook seems to be a China and an employment story," added a significant food exporter executive. "It will be interesting to see China's positioning after the party conference and whether fuller than expected employment in key markets will stave off recession."
Questions remain. As one respondent observed, global economies are now having to deal with the reality of living beyond their means exacerbated by stimulus packages flowing from the pandemic — likened to "managing through a hangover".
A director noted that NZ's productivity has materially fallen. "The economic challenges in the UK and Europe are serious and will impact globally."
The climate change imperative hangs over us all. CEOs assessed this risk at 6.84/5. But respondents pointed to signs of improvement in global logistics challenges.
A chair noted while New Zealand has taken on more debt during Covid, there are many other countries that have turned a bad situation into a very bad situation.
"There are serious concerns worldwide (Ukraine for example) and the rest of the world seems more advanced regarding Covid recovery — we need strong positive leadership in NZ to catch up."
Opinions from the top NZ CEOs
The Herald's Mood of the Boardroom 2022 CEOs Survey attracted participation from 108 respondents.
This year, 90 chief executives and 18 senior directors or chairs, took part. They include leaders of NZ's biggest companies ranging across agribusiness, banking and finance, manufacturing, aviation and tourism, education, telecommunications, environmental services, energy, insurance, professional services, and more.
The survey was in the market from September 3-17.
The Herald survey is conducted in association with BusinessNZ. BusinessNZ also put 15 questions from the survey to its membership which includes SMEs. Those results are on B24 of this report.
The CEOs survey was launched in 2002 within a Herald State of the Nation report.
The debate between the finance minister and their opponent is a feature of the annual launch breakfast. It has featured Finance Ministers, the late Sir Michael Cullen, Sir Bill English, Steven Joyce and Grant Robertson. The opponents have included Don Brash, Sir John Key, David Cunliffe, Amy Adams, Paul Goldsmith and now Nicola Willis.
Finally a huge thank you to everyone who has played a role in this year's survey — particularly the participants — who despite the attractions of international travel (finally), made the time to take part.
We appreciate your effort.
• Fran O'Sullivan Executive Editor Mood of the Boardroom
