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High dollar eroding business confidence

07-03-2012
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in 
 High dollar eroding business confidence

The high Australian dollar is fast eroding small business confidence, with a survey showing a surge in the number of companies worried about its impact.

According to a report in the Sydney Morning Herald, credit reporting agency Dun & Bradstreet found that the proportion of small companies citing the strong dollar as a big concern had risen to 37 per cent last month, up from 25 per cent in January.

The fears were greatest among the struggling manufacturing and retail industries - which have faced greater competition from overseas due to the dollar's strength, the SMH report said.

The chief executive at Dun & Bradstreet, Gareth Jones, said the negativity was driving more of the 1200 companies surveyed to focus on cutting costs, rather than investing or hiring new staff.

Amid rapid growth in spending on foreign online stores, more than half of retailers included in the survey were expecting slower sales growth in the year ahead.

''Clearly, the pressure of a sustained high in the Australian dollar is starting to bite for main-street businesses,'' Mr Jones said. ''Consumers are increasingly savvy and adept at seeking out cheaper alternatives.

''Businesses need to adapt quickly or risk losing customers overseas.''

The dip in confidence was also confirmed in a separate Sensis survey, which found 30 per cent of 1800 businesses nationally were worried about their prospects.

 

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