For an export economy such as New Zealand's, access to markets and lowering barriers are needed not only for growth, but also for sustainability, the PwC 19th Annual Global CEO Survey says.
Forty-seven New Zealand chief executives contributed to this year's survey, completing an online survey between September and November 2015. An additional nine chief executives participated in detailed interviews.
PwC New Zealand chief executive Bruce Hassall said a well-defined purpose was becoming increasingly important for New Zealand companies, reflecting the fast-paced world they lived in today.
It was not only becoming more connected through the impact of technology and digital, but also because customers were demanding organisations stayed plugged into the world around them - and their communities.
‘‘It's become more difficult to pin down where growth will come from across the globe but the United States and China, and to a lesser extent Germany and the United Kingdom, remain the markets most chief executives globally cite among their top overseas growth markets.''
New Zealand respondents were once again looking to Australia (70%), China (60%) and the US (47%) as the top three markets in the coming year, he said.
China's economic rebalancing and the fragility of its debt-laden local government and private sector continued to concern investors and rattle entire industries - not least the commodities sector that rode the wave of China's rapid growth and was now bearing the brunt of the slowdown.
Economists were predicting China's gross domestic product growth to ease to 6.5% and once again for India to be the star of the Emerging Seven (E7) markets, Mr Hassall said.
As China's slows down overall, the composition of the growth was shifting from an infrastructure-driven economy to consumer spending of the rising middle class, which could bode well for New Zealand's dairy, meat and consumer products, and less so for iron ore, coal and others dominating Australian-Chinese trade.
‘‘Despite what some of the headlines might lead us to think, the world's economic outlook isn't solely dominated by China's slowdown.''
There was a growing movement towards regional trading blocs, with the most significant being the Trans Pacific Partnership (TPP) agreement reached between 12 nations last year, he said.
In this year's survey, only 23% of New Zealand respondents said the world was moving towards a single global marketplace as opposed to 77% believing there was a move to regional trading blocs.
While everyone agreed the TPP would be significant for New Zealand, the unknown was how it would play out. Trade agreements had existed with countries such as China, but the TPP was not a short-term or medium-term arrangement. It was long-term, Mr Hassall said.
The Ministry of Foreign Affairs and Trade predicted the TPP would add an estimated $2.7 billion a year to New Zealand's GDP by 2030.
Trade agreements were not happening in a bubble. The fluctuations in currencies and commodity prices were a constantly moving variable.
Last December, the US Federal Reserve raised US interest rates for the first time in nearly a decade.
Economists were predicting the US would raise rates again and, barring major global challenges, the Bank of England was likely to follow suit at some stage this year, he said.
Together with China's surprise devaluation of the yuan in August this helped explain why exchange rate volatility, cited by 73% of chief executives, was third among concerns globally.
In New Zealand, exchange rate volatility was also the third-highest threat to business growth this year - tied with over-regulation at 74%.
The volatility concern had jumped from 66% in 2014, the last time it was measured by the survey. History suggested New Zealand's chief executives had different reasons than their global counterparts, Mr Hassall said.
The New Zealand dollar was the ninth most-traded currency but only the 54th largest economy by GDP. The volume of New Zealand dollars traded in excess of the size of the economy had led to speculative capital flows but that was not new.
Although it might not always be welcome, chief executives and their finance teams based in and operating in New Zealand had learned to proactively manage those risks, he said.
‘‘Given all of these various uncertainties New Zealand chief executives are facing, it's little wonder they're divided about whether there are more threats or opportunities today.''
Two-thirds of New Zealand chief executives believed their business faced more threats today than three years ago while 55% saw more opportunities.
