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CEOs pessimistic about the Australian economy
Australian chief executives were pessimistic about business conditions, even before this summer’s devastating bushfire season, suggests an industry survey.
CEOs pessimistic about the Australian economy
Australian chief executives were pessimistic about business conditions, even before this summer’s devastating bushfire season, suggests an industry survey.
According to results from the Australian Industry Group (Ai Group), fewer CEOs expect an improvement in their own turnover, profit margins and productivity in 2020 than for any year since 2015.
Ai Group chief executive Innes Willox said: “While Ai Group’s latest survey reaffirms an immediate outlook for the economy that is flat at best, we can secure our future economic prosperity with timely and multifaceted action to address substantial headwinds.
“It’s a challenge for governments, for businesses and for the broader community, but it’s one we should rise to with confidence that we will emerge stronger.”
The industry is calling for measures to stimulate the economy and lift productivity as business leaders struggle with global uncertainty as well as local policies.
“Another layer of concern arises from the fragile state of domestic demand in Australia, with both household and business spending indicative of the slow growth of domestic incomes (outside of the mining sector) and the pervasive mood of caution in both the business and household sectors,” Mr Willox said.
The results also show a smaller number of businesses are planning to boost spending on capital investment as well as research and development compared with previous years.
Further, the Australian fires are only weakening an already sombre business outlook.
“Australia’s extraordinary bushfires have further weakened the outlook for 2020. Considerable resources and effort will now need to be directed to recovering lost ground,” Mr Willox said.
Business leaders’ low expectations match the RBA’s analysis which cautions Australia’s real GDP growth to remain well below 3 per cent until the end of 2020 (and rising to just 3.1 per cent in 2021), with no discernible improvement in consumer and wage inflation from their current weak (below-target) rates of around 1.7 per cent and 2.2 per cent, respectively.
Australian growth forecasts from international agencies and private-sector economists are generally even less optimistic.
Read more on Australian economy here.
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