Less than a quarter of SMEs believe their business has been hurt by the rising Australian dollar contradicting claims that exporters have been badly hit by the currency’s strength, a new report says.
The Executive Connection, a leadership organisation for CEOs and senior executives, recently surveyed 300 SME chiefs about the impact of the dollar on their business.
According to the survey, 41% claim their business has been unaffected by the strong currency, with only 21% saying their business has been adversely affected. Meanwhile, 36% say their business has been affected positively.
The findings are in stark contrast to recent reports, which claim the dollar is wreaking havoc on key industries including manufacturing and tourism.
The rampant exchange rate has been a boon for households by making imports cheaper, slashing the cost of overseas holidays and keeping inflation down in the process.
But figures indicate it is also crushing the competitiveness of local manufacturing companies, and the job security of their workforce, by increasing the price of their goods on the international market.
According to figures from the Australian Industry Group, only 7% of manufacturing company CEOs say they are confident their products will remain competitive with the Australian dollar worth more than $US1.
AIG chief executive Heather Ridout has described the situation as a “miserable story” for local manufacturers, calling on the Government to intervene.
Meanwhile, the Queensland Tourism Council says it its increasingly concerned about the impact the Australian dollar is having on international and domestic tourist markets.
According to the council, the number of Japanese travellers arriving in Australia has dropped by 13% in the past year, and even fewer locals are choosing to see their own country.
But Chris Gorman, chief executive of The Executive Connection, says many SMEs are benefitting from the surging dollar.
“There has been a lot of negative sentiment expressed in the media about the strong Australian dollar and its affect on businesses, but these results highlight the flipside,” Gorman says.
“It’s clear that many SMEs are actually enjoying the buying power of the Australian dollar and taking full advantage of the favourable conditions.”
However, Gorman says the volatility of the Australian dollar has highlighted the need for CEOs to develop adaptable and flexible business models.
Gorman says that while a quarter of respondents say they have already adapted their business strategy to account for the high dollar, 23% have not yet felt the need.
“SMEs need to consider market volatility and fluctuating economic conditions more than larger corporations because they are often more vulnerable to turbulence,” he says.
