TIN100 Report 2008

TIN100 2008 Report

After a year of challenges, and seemingly difficult times ahead, the drop in the NZ$ comes as welcome relief to technology exporters whose margins have been buffeted by unfavourable economic conditions.

So says Technology Information Network (TIN) Managing Director Greg Shanahan following the release of the fourth annual TIN100 report and survey of New Zealand’s 100 largest globally-focused technology businesses. (TIN100 2008 Report).

This in-depth industry overview—conducted with the support of New Zealand Trade and Enterprise and professional services group Ernst & Young—revealed that New Zealand’s globally focused technology sector grew combined revenues by just 5% over the past year to reach NZ$6.4 billion. This was down from 8% the previous year.

The overall numbers describe a tough two years but a significant number of companies had enjoyed double digit growth nevertheless.

“Economic factors included, the continuing rise in the value of the NZ$, a slowdown in major markets, the US in particular, rising raw material prices and intensifying competition,” he said.

The impact of this, says Greg Shanahan, included slowing revenue growth, profit erosion, a rise in business failures, a move toward foreign acquisition of NZ businesses, an overall rise in merger and acquisition activity and a widespread move of manufacturing offshore.

“The acceleration in the trend to place manufacturing offshore will obviously have a lasting change on the technology sector and overall economy well beyond any improvement of business conditions,” he said.

Despite the clouds, the findings also produced some definite silver linings.

“The difficult economic environment aside, it was surprising how many sizeable companies were able to achieve strong double-digit growth. Our leading companies are increasingly acquisitive buying businesses locally and overseas. Many fast growing businesses have been insulated against the weakening international economy by, involvement in high growth sectors e.g. food or energy, by providing essential solutions to utilities or government agencies, or creating greater efficiencies and cost savings for their customers,” he said.

The other very positive sign is the recent drop in the value of the NZ$ vs. US$ and signs of softening in raw material prices as the world economy slows down. This will improve the bottom line for most companies said Shanahan. It will provide significant relief for those companies who continued to show revenue growth and hopefully make it easier to weather the tough times for those that do not.

“The current economic climate is obviously one of great uncertainty. I am however optimistic that many of the high growth companies in our 2008 report will continue to perform strongly in 2009,” he said.

About TIN Report

The TIN 100 2008 Report is a benchmarking study of the country’s 100 largest (by revenue) technology companies in the areas of High Tech Manufacturing, ICT Software/Services and Biotechnology.

The TIN100 report is proudly sponsored by

To read a NZ Herlad article regarding this publication of the TIN100 >>click here