Despite a rising Australian dollar and high fuel prices, Australian exporters remain confident about the future according to a new survey.
That’s especially true for those exporting to Europe, with 65 percent of those surveyed expecting an increase in orders to that region over the next year.
The 2007 DHL Export Barometer has also found that with world economic growth at a 30-year high, 69 percent of exporters expect an increase in orders over the next 12 months.
In addition, more companies are investing in technology to facilitate trade, and the biggest supply side constraints are manufacturing capacity and access to supply chains.
Austrade Chief Economist Tim Harcourt says the report, a joint industry survey with logistics giant DHL, shows exporters remain resilient despite the strength of the dollar and high oil prices.
"A return to the more traditional markets such as Europe suggests exporters are diversifying their opportunities, although China and South East Asia continue to remain strong as key trading partners," he says.
The 2007 survey shows something of a role reversal, with China at 61 percent and South East Asia at 56 percent now behind Europe (65 percent) as the markets where exporters are most likely to increase their orders in the coming year.
That’s a surprising result, according to DHL Oceania Strategic Development Group Manager Paul Bellette, but proves companies are taking a global approach and not relying on specific markets.
"However, despite Europe’s ranking, China remains a key driver of the global economy and Asia Pacific is DHL’s fastest growing region," he says.
According to the survey, manufacturing capacity and supply chains remain key constraints.
"Over the past three years supply chains have proved an increasing issue for exporters, up from 12 percent as an area of concern in 2005 to 44 percent in 2007," Bellette says.
"Consolidation of suppliers is one way exporters can reduce supply chain inefficiencies and costs."
The survey results show that infrastructure bottlenecks are also an issue, though less so than previous surveys.
"The main supply-side influence was manufacturing capacity, that is: a shortage of plant, skilled labour and capital, which suggests contrary to popular belief, demand for Australian manufactured goods is strong," Harcourt says.
However it is exporters’ bullish confidence that is seeing an investment in new technology. Of those surveyed, more than half had invested in new technology capabilities in the past 12 months.
Exporters in the mining (77 percent) and manufacturing sectors (67 percent) are significantly more likely to have invested than the other sectors.
"Technology is a good indicator of export confidence and the survey results show 85 percent of exporters now use the internet extensively for sales and marketing," Bellette says.
"The Barometer’s findings support DHL’s experience, with two in three of our customers processing their shipments electronically."
The survey also finds that in Australia’s strong performing labour market, 80 percent of Western Australian and 79 percent of Queensland exporters expect wage increases over the next 12 months.
"The resources boom is continuing to drive up demand for labour and the growth in wages," Harcourt says.
"Western Australia currently boasts an impressive 3.2 percent unemployment rate, therefore it is no surprise that workers expect fuller pay packets."
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