Jump in confidence among Australian small business exporters
Findings from Efic’s latest exporter sentiment index indicate that small to medium enterprises are increasingly confident about prospects in an international marketplace.
The bi-annual index, which surveyed more than 1,200 Australian small and medium exporting businesses, looks at perceptions about current and future economic conditions and the international business outlook.
“All key indicators have lifted significantly since the last survey, which was in market in November 2016,” said Swati Dave, CEO and Managing Director of Efic.
“We have found that confidence among respondents is strong in terms of economic conditions, their financial position and perceived future profitability from international revenue and employee growth.”
Expectations for future economic conditions over the next 12 months have increased by 10 basis points since the last survey. There is also a much stronger expectation of international business profitability with 58 per cent of all respondents anticipating increased profitability over the next year. Around half of surveyed businesses are expecting to increase employee numbers, an increase of 6 basis points on the previous survey.
Two thirds of all respondents are expecting future sales revenue to increase. Businesses with a turnover of $10m to $100m are even more confident of growth with 70% expecting sales revenue growth from overseas sales.
“The increased confidence is driven by an increased demand in export markets and due to improved sales strategies,” says Ms Dave.
While positive sentiment is significantly higher since the last survey, competition in international markets has increased. 27 per cent of respondents that expected declining sales cited increased competition in international markets. This is a significant increase from the November 2016 results when 12 per cent of respondents felt constrained by international competition.
Access to finance appears to be easing slightly with 34 per cent saying that borrowing money for an overseas venture will be easier in the year ahead. “However one in five respondents surveyed are expecting finance access to become more difficult – primarily due to the cost of credit increasing and working with financiers that do not understand the complexities of managing working capital through the export cycle.” Says Ms Dave. “It is in cases like these where Efic is able to help with expertise in exporting and the ability to support businesses when their bank may not be able to assist.”