Australia was the country with the most-improved global perceptions around growth in 2012, according to the new Grant Thornton Global Dynamism Index.
The index, which ranks 60 countries on a wide range of economic indicators, is formed through interviews with 402 key executives who lead businesses with a global footprint. Grant Thornton then compares the business environment across different countries, to determine which country sees the most improved perceptions from year to year.
Australia didn’t come first in any of the indicators assessed by the index. However, its strong all-round performance led to it placing first. Australia was perceived to have improved rapidly in labour productivity and solid growth in real GDP.
The result is very positive, especially given Australia is a developed country which has grown strongly in the past, said Grant Thornton Australia chief executive officer Robert Quant.
“Political campaigning and doomsday debate aside, the fact is Australia has a lot to offer international businesses planning to expand into Asia-Pacific,” he said. “Not just 22 years of unbroken economic growth, but also strong institutions, skilled, productive people and a strong culture of investment in R&D.”
This global optimism about growth prospects in Australia has been mirrored in the levels of investment going into the country, Grant Thornton noted.
Australia attracted $57 billion of foreign direct investment in 2012, the seventh highest level globally, outdoing its relative size as the world’s 12th largest economy.
Levels of foreign direct investment have increased 12% per annum on average over the past decade, which is much faster than in the United States (5%), France (6%), Germany (7%) or the UK (8%).
Much of this investment has been in mining infrastructure, the demand for which is slowing. However, global executives were more positive about Australia than in previous years, despite 2012 having been dominated by talk of the mining investment boom ending.
John O’Donnell, private clients partner at Grant Thornton Australia, told SmartCompany that this would have positive effects for Australian businesses.
“If there’s going to be investment that will create business activity in Australia. It’s seen as a place to grow faster, where you can get a higher rate of return on your investment. And that’ll feed through to Australian businesses.
Asia’s burgeoning middle class offers up opportunities for Australia’s mid-market firms, particularly those in banking, education, healthcare and tourism, Quant added.
“These are the companies that are set for growth, and who will be the next growth engine of our economy. China alone has 1.3 billion people. Even if you target just 5% of the population, you have a market larger than France or the UK. No growing business can afford to walk away from that.”
Myriam Robin is a media reporter at Crikey. She’s an economics graduate who previously reported on business for LeadingCompany and SmartCompany.
