The lower Australian dollar since 2013 has helped Australian businesses and the rebalancing of the economy, with US 75 cents a “sweet spot”, though more needs to be done to lift competitiveness, according to a new survey by the Australian Industry Group.
The Ai Group’s 248-company CEO survey, Business Responses to the Australian Dollar, found a lower dollar had a “significant role” in improved conditions and sentiment in 2015/16. The average has been 73 cents in the year to May, with a post-float average of 77 cents and a peak of 110 in 2011.
“The new report… sees the sustained lower Australian dollar together with greater trade opportunities as having long-term and overall positive impacts on Australian-based manufacturing and services businesses,” said Ai Group CEO Innes Willox in a statement. He added that there was an associated natural negative of higher imported input costs.
The dollar had assisted a higher number of companies to join the ranks of exporters in 2014 – 2015, recent ABS data has shown. This included roughly 300 manufacturers.
“The lower dollar is a major factor in opening opportunities for exporters, with 61% noting that expanding overseas markets was one of their growth strategies,” said Willox.
However, more needed to be done to make Australian companies more competitive to aid in the post-mining boom economic transition.
“Many Australian businesses are still developing as exporters of high value-added goods and services and many are not as well integrated into global supply networks as a means of realising the value of more complex goods and services,” Willox suggested.
“Australian exporting businesses and those competing with imports need to be increasingly focussed on efficiency, reliability, innovation, collaboration and continuous improvement.
Click here to see the survey results.