Australian chief executives were pessimistic about business conditions even before this season’s catastrophic bushfires, a survey reveals.
The Australian Industry Group’s latest CEO survey shows business leaders expect economic conditions to deteriorate in 2020, partly due to uncertainties in the global economy as well as local policies.
The peak industry association is calling for measures to stimulate the economy and lift productivity.
More than 250 CEOs were surveyed in late 2019, with less saying they expected an improvement in turnover, profit margins and profit margins compared to recent years.
The results also showed a smaller number of businesses planned to boost spending on capital investment as well as research and development, compared to the past two years.
Ai Group’s chief Innes Willox has pointed to uncertainty in Australia’s energy and climate policies as another reason businesses are cautious.
“Another layer of concern arises from the fragile state of domestic demand in Australia,” he said.
“With both household and business spending indicative of the slow growth of domestic incomes – outside of the mining sector – and the pervasive mood of caution in both the business and household sectors.”
Bushfire recover efforts mean considerable resources will go towards recovering lost ground, he added.
Two in five CEOs pointed to a lack of a customer demand as the biggest limitation to business growth, while 20 per cent put it down to skill shortages.
But a greater number of businesses are planning to increase their workforce in 2020, which should help employment growth.