Whilst exchange rates and high oil and fuel prices were the key factors impacting negatively on export sales in the past year, one in four (25 per cent) exporters believe reliability of transportation is the biggest risk to supply chain process, with 54 percent of exporters claiming their customers have become more demanding in terms of delivery lead-times, the 2006 DHL Export Barometer found.
Developed in conjunction with Austrade, the DHL Export Barometer saw the Middle East shoot up as a key export destination, with 62 per cent of all exporters expecting the region to increase orders in the coming year. This 26 per cent rise placed the Middle East behind only one other country - China - as a source of new export business.
Tim Harcourt, Austrade Chief Economist says exporters are conscious of the global economic effects of rising oil prices, but believe that it will be alright in the long run.
“Furthermore, the issue of transport/infrastructure ‘bottlenecks’ has faded relative to 12 months ago.”
In the May 2005 Barometer, 63 per cent of exporters had expected capacity constraints, and they saw manufacturing capacity and then transport infrastructure and supply chain blockage as the biggest issues.
Harlis Malkic, General Manager, Australia, DHL Express says the results underscore the strength and resilience of the export community.
“Despite a short term slump, 60 per cent of companies are forecasting export increases in the next 12 months: exactly the same figure as in April 2005. So there is certainly a feeling that things will return to normal once the uncertainty generated by a spike in oil prices settles down,” he says.
According to Tim Harcourt the rise in the Middle Eastern exports is driven strongly by the United Arab Emirates (UAE), where there’s a boom in both housing and leisure constructions.
“As many Australian exporters go to Dubai as they do to India, it’s proving to be a happy hunting ground for many Australian businesses despite the competitiveness of the local market,” he says.
The DHL Export Barometer results confirmed China’s place as Australia’s rising star in the export market: it is expected to provide the most growth in both the short and long term. In the next 12 months one in three (66 per cent) respondents are expecting it to provide increased orders and the People’s Republic ranked highest in the list of Top 5 destinations in five years’ time - 30 per cent cited China - slightly ahead of South East Asia with 29 per cent.
Harlis Malkic says the results on China and South East Asia are no surprise.
“The findings reflect DHL’s investment and strategy in the region. The focus is on getting the infrastructure right, to make exporting to Asia easy and efficient. In fact, to date, DHL has invested a staggering US$1.6 billion dollars in the Asia Pacific region to achieve this,” he says.
“In China alone, we are building on two decades’ experience in that country, and have invested almost US$300 million in the last few years. We have also recently announced plans for a new US$24 million DHL-Sinotrans Headquarters, purpose-built to accommodate our anticipated growth.”
Japan, however, was below its Asian counterparts in the rankings.
“Despite Japan’s recovery it remains ranked towards the bottom of the chart along with the other ‘Asian Tigers’, Hong Kong and Taiwan. These countries may be missing out on export orders due to the rush to Shanghai and other booming urban centres in China,” Tim Harcourt adds.
Harlis Malkic said the diversity of regions being exported to is a good safeguard against any downturn.
“The Australian exporters tend to be very proactive and are always looking for new opportunities. This adaptability is crucial to weather-proofing exporters against market volatility.”
Industry breakdowns in the DHL Export Barometer reveal that mining continues to be the rush that never ended. Mining exporters expect strong performances over the next three months, with 50 per cent expecting increased orders over that period, followed by 44 per cent of services exporters and 40 per cent of manufacturers.
“However, the export figures are definitely not just about rocks and crops, with services exporters the most bullish about the next 12 months. Around 69 per cent of services exporters expect business to improve over the year ahead, compared to 67 per cent of miners and 63 per cent of manufacturers. Once again, this is testament to a broad range of exporters making their mark; as important as the resources boom is, it’s certainly not a bubble that all our export hopes and dreams are pinned on,” Tim Harcourt says.
The shortage of skilled labour is showing no signs of slowing, with 72 per cent of exporters complaining of a shortage of white collar/professional labour, whilst 56 per cent said they couldn’t get enough skilled tradespersons and 44 per cent lack unskilled labour.
37 per cent of exporters surveyed were concerned about the level of investment in education and training that is needed to ensure a steady flow of well trained, well qualified skilled workers in the future.
About the DHL Export Barometer
The DHL Export Barometer is an initiative aimed at analysing export confidence in Australia and identifying export trends. Developed in consultation with Austrade and based on nationwide independent research, it examines the business outlook of Australian exporters, highlights changes in overseas market demand and provides insights into the factors impacting on Australian export trade.
The research sample size was 308 exporters.