Survey says, the high Australian Dollar is hurting business
Australia's business chiefs are predicting an uneven economic growth outlook for Y 2011, with trade exposed industries particularly hit by the strength of the Australian Dollar, survey said Monday.
A research conducted by the Australian Industry Group (Ai Group) and Deloitte, surveyed 530 CEOs from a range businesses in manufacturing, services and construction.
According to statement released by Ai Group Chief Executive Heather Ridout, different growth rates in the multi-speed economy, compounded by higher exchange and interest rates, has raised concerns about the underlying competitiveness and sustainability of Australia's economic prospects.
The research found that 93% of manufacturing CEOs see their exports as uncompetitive as a result of the Australian Dollar being at parity with its US counterpart. This compares with 87% in the services sector and 82%in construction.
The survey also found 100% of services and construction businesses, and 96% of manufacturers said their products in local area were now uncompetitive when competing with cheap imports, due to the Dollar's strength.
Meanwhile, manufacturers expected their activity to remain weak in Y 2011, preparing to slash capital investment by 28.4% to cut jobs by 1.2%
However, service sector sales are expected to expand by a significant 12.5% in Y 2011 with employment expanding by a solid 6.4%.
Construction sales too are seen growing by 12.9%, although employment is forecast to rise by a more modest 1.2%.
The Reserve Bank of Australia will meet Tuesday to discuss whether to lift interest rates or not.-Paul A. Ebeling, Jnr. www.livetradingnews.com