Author: Tim Harcourt
JW Nevile Fellow in Economics & Professor,
UNSW & The Airport Economist
Australian exporters are learning to live with a high dollar but are feeling the intensity of international business competition. The power of proximity is also replacing the tyranny of distance as Australian exporters focus their activities on the Asian Pacific with China and South East Asia leading the charge. That’s the key finding of the 2013 DHL Export Barometer released this month after a comprehensive survey of close to 700 Australian export businesses.
Export confidence was maintained from 2012 when businesses recovered from a GFC ravaged world economy. 58 per cent of exporters anticipate orders will increase, which is just a shade higher than last year’s forecast. Exporters have successfully ridden out the sub-prime storm. But there are competitiveness pressures, as just under half (48 per cent) of exporters expect an increase in profits. Similarly Australia’s exporter labour market remains tight with 58 per cent of exporters expecting to pay a wage increase over the next 12 months.
Australian exporters are still looking to the big three engines of growth in Asia – China, India and ASEAN. But New Zealand and the Middle East are also resilient. 34 per cent of exporters say they focus on a range of markets as a ‘hedge’ to manage fluctuations in the exchange rate but they are focusing their energies regionally.
The Australian dollar is still adversely affecting most exporters; but they are using a range of approaches to deal with exchange rate related competitiveness pressures. Most of them have become importers – around 74 per cent of exporters now import (compared to around a third 10 years ago) and become enmeshed with supply chains. Very few exporters hedge – around 19 per cent – and only 13 per cent think it is an effective method of dealing with exchange rates. A majority look to different markets but only 10 per cent think that is effective given the strength of the dollar across the board.
Despite the online revolution in the retail sector (which is mainly imported consumer items) only 38 per cent of exporters sell online. We may well see a quiet revolution now in online exporting following the trend in importing so far.
To view the a summary of the 2013 DHL Australia Export Barometer report, please click here.
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