KEY POINTS:
Soaring fuel costs and weak sales are crushing business confidence to a 33-year low - but even in this environment, some firms are prospering.
BNZ's latest business confidence survey shows dairying and dairy support (including animal health and genetics), oil, coal and gas exploration and development, electricity generation and distribution companies, insolvency practitioners, and legal firms, particularly those that specialise in litigation, are flourishing.
Tim Jones, a partner at Auckland law firm Glaister Ennor, confirms litigation is the busiest practice area, saying that when people are financially stressed, they tend to fight cases they would otherwise have settled.
Mining company Pike River Coal on the South Island's West Coast is opening up New Zealand's largest deposit of hard coking coal, and has recruited more than 70 staff locally and overseas in preparation for production starting next month.
Peter Whittall, mines general manager, says the company will eventually employ 150 staff when full production starts in the middle of next year, with estimated downstream employment for at least another 450 locals.
BNZ's survey shows property managers are also run off their feet as vendors failing to sell in the flat real estate market are opting to rent their houses instead. Ross Davey, managing director of Quinovic property management says there is always a "huge increase" of rental stock at this point in the property cycle.
"There's a definite trend in New Zealand towards outsourcing and away from do-it-yourself [property management]."
Davey says Quinovic grew by more than 60 per cent last year.
The industry facing the biggest challenge, says Tony Alexander, BNZ's chief economist, is tourism. He expects the downturn in international travel to be as great as during the Asian crisis, when visitor numbers fell 5 per cent.
Tourism accounts for 18.3 per cent ($8.8 billion) of New Zealand's export earnings - ahead of dairy ($7.3 billion). But the latest figures show international visitor expenditure grew only 0.2 per cent in the year to March last year. Westpac chief economist Brendan O'Donovan says visitor numbers from traditional Northern Hemisphere markets are languishing, but those from Australia and emerging markets are growing.
An economic downturn doesn't affect everybody in the same way, says Alexander. "Just because you're in recession doesn't mean all industries suffer, or all operators within a generally suffering industry will suffer."
Even within sectors hit hard by the recessionary climate, such as exporting, there are exceptions - businesses managing to thrive.
Mark Sutton, general manager of the New Zealand Mint, says the company is "extremely busy - at the moment we're growing about 150 per cent a year". It turns over $30 million a year and projects it will hit $50m over the next 12 months.
The mint creates investment coins, known as bullion, which are becoming more popular as other investment vehicles falter. It also manufactures commemorative, collectible coins. Outside New Zealand, many governments restrict what mints may place on coinage, so they cannot produce competing gift products. Up to 90 per cent of the New Zealand Mint's limited edition commemorative coins are exported, including to the developing markets of China, India, Russia and Eastern Europe. Sutton says these are the growing markets.
"They're actually booming while Western countries are struggling. There are always markets doing well in all times. It's just a matter of identifying them, growing with them and giving them the right products."
Sutton says business people cannot control the exchange rate so the key to success lies in a continual focus on innovation. "Like a lot of New Zealand companies, we are very innovative. We come up with all our own creative ideas in-house."
The business is shortly moving to larger premises incorporating a tourist centre where visitors can view the minting process.
Sutton urges other export businesses not to be afraid of using New Zealand as a brand. "We have an excellent reputation worldwide for innovation and creativity. You have to be different to be competitive in the world market."
He believes another strength of the company is its multi-cultural employee mix. "We speak Russian, German, French, Mandarin and Cantonese in the office."
Skilled migrant employees "add a whole new dimension" to business.
Richard Manthel, managing director of Robert Walters recruitment, agrees there is some exceptional talent around "and if you can't find it in New Zealand you should be looking offshore - it's not a massive barrier". Manthel urges employers to have the confidence to hire people from overseas wanting to come and live and work in New Zealand, perhaps without meeting them.
"New Zealand companies don't have the confidence to employ people overseas sight unseen, and prospective employees don't have the confidence to jump on an aeroplane and arrive in New Zealand with no job."
