Australian Business Unbowed by US Woes

15 January 2008

SYDNEY: Despite doomsayers' fears that the sky is about to fall on the economies of the US and Europe, business chiefs Down Under are confident their enterprises can weather any financial storms.

The latest International Business Report from accountancy firm Grant Thornton ranks optimism in Australia seventh among 32 countries. At a three-year high of 77%, this is a reading well above the global average of 56% - and 15% up on 2007.

Western Australia's mining boom is one of the chief drivers of this economic optimism, says Tony Markwell, the beancounter's national head of private business services.

In New South Wales, confidence has jumped from 53% at the beginning of 2007 to 74% in 2008, and in the state of Victoria from 48% to 72%.

The survey also reports that 60% of Oz businesses expect to raise their selling prices over the next year; 70% expect turnover to increase; and 33% expect their exports to almost double over 2007.

However, Markwell warns of some clouds on the horizon, namely the end of fixed rate mortgage deals for millions of the nation's homeowners, leading to a possible squeeze in spending.

The annual GT survey, which questions 7,200 privately-owned businesses across 32 countries, shows the Philippines and India retaining their 2007 rankings as the most optimistic countries, at 95%.

Even in the US, where the subprime mortgage crisis has been a catalyst for financial turmoil elsewhere, business confidence has risen from 14% to 22%.

At bottom is Japan where optimism has been knocked by poor consumer demand.

Data sourced from Sydney Morning Herald; additional content by WARC staff