The Australian Industry Group has completed its annual survey of CEO outlooks and probably wishes it hadn’t. Dour results have flowed in across the board from 350 of the best and brightest.
Across all industries, Australian CEOs told us that in 2013 they expect:
Sales revenue (annual turnover) will improve for 39% of businesses, but decline for 40% of businesses. 21% expect sales revenue growth to be flat, relative to a year ago.
Employment will expand in a quarter of businesses, but more than a third (37%) plan to reduce employment and 38% plan no change to their employment numbers.
Capital investment expenditure will rise for a quarter of businesses, but decline for 31% of businesses and remain unchanged for 44% of businesses.
R&D spending will increase for 21% of businesses, decline for 17% and remain unchanged for 61%. This suggests many businesses place a high priority on innovation and staying ahead of their market, even when they are seeking to reign in costs elsewhere in their business.
Export income is expected to rise for 18% of businesses, decline for 16% and remain unchanged for 65%. This reflects the high Australian dollar and lack of growth in export volumes since 2011.
Imported inputs will increase in 30% of businesses and reduce in 11%. 58% of businesses will not change the value of inputs they import. This may reflect an acceptance among CEOs that the Australian dollar is likely to stay higher for longer into 2013 (see discussion below).
Input costs will rise for half of all businesses, but 8% are expecting their input prices to fall.
82% of CEOs expect the prices they pay for energy will rise further in 2013.
44% of CEOs expect their unit labour costs to increase in 2013, relative to 2012. 13% of CEOs expect them to go down.
On labour productivity, one third of CEOs (33%) are expecting to see an improvement in 2013. Of more concern, 13% say they expect labour productivity in their own business to fall in 2013, relative to 2012 and over half (54%) expect no improvement.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
