ABN 98 004 378 289
Export House, Level 2, 22 Pitt St, Sydney NSW 2000
Box 1076, Sydney NSW 2001
tel: +61 2 8243 7400 | fax: +61 2 9251 6492 | info@aiex.com.au | www.aiex.com.au
High dollar crushes our exporters
FOR IMMEDIATE RELEASE
“If you thought Australia’s exports were going well, it might be time to think again,”
says Ian Murray, Executive Director of the Australian Institute of Export. “Yes” he
said, “mining exports are continuing to increase but exports outside of the mining
sector are feeling the effects of the GFC and an ever climbing dollar.”
The Institute launched its most recent survey on the effect
of the rising dollar and
our exports, and it’s not a pretty picture. From a sample of over 250 respondents,
61% said the strong Australian Dollar is having a negative impact on their export
sales. Of those, more than half (55%)said the decline in sales was between 10%
and 30% while nearly one quarter (24%) experiencing a drop of more than 30%.
“The Institute was surprised by the response and more surprised at the number of
companies that are experiencing difficulties,” Mr. Murray said.
“What was even more alarming was the belief among many exporters that if the
dollar remains high, an even greater number will be hurting. Concerning too was the
fact that while some cases sales volume is being maintained, margins are under real
pressure from the strength of currency.”
“The industries that appear most affected are Education, Australian based
companies working for overseas clients, and Agriculture: where there are no
imported components to help offset the cost of production.” Mr. Murray said, “Wine
exports, particularly those who depend on price, are now having trouble selling to
the Europe and USA.”
“What seems to really worry exporters is the threat of rising interest rates at the
same time as having a strong Aussie dollar. This will put many export companies
under an even greater pressure as it will slow marking investment when it is need
most,” Mr Murray said.
Some companies are going against the trend and importing a significant part of their
raw materials at very good prices. Some of them are stockpiling while the dollar is
ABN 98 004 378 289
Export House, Level 2, 22 Pitt St, Sydney NSW 2000
Box 1076, Sydney NSW 2001
tel: +61 2 8243 7400 | fax: +61 2 9251 6492 | info@aiex.com.au | www.aiex.com.au
high, and other larger companies are relying on their long term contracts and their
ability to manage risk more efficiently.
The study made it clear that exporters need some assistance if Australia is to retain
a healthy and diverse export base. “The first thing that needs to be done is to build
the finance skills, and in particular the foreign exchange capabilities of small to
medium size exporters. If we don’t, companies will continue to find themselves in
trouble,” Mr Murray said.
Travelex Regional Divisional Director, Asia Pacific, Kerry Agiasotis
said the current
climate was an important reminder for both importers and exporters that they should
always focus on how to protect their profit rather speculating on where the dollar
might go.
“Unfortunately, every company that conducts business internationally is likely to be
exposed to movements in the value of the $AUD. Businesses need to understand
the risk to their bottom line of adverse movements in the dollar and take steps to
protect their profit margins.
“With the high dollar presenting a number of challenges for exporters, now is the
perfect time for exporters to review their FX strategy. While it can appear daunting,
managing your foreign exchange doesn’t need to be complicated
and small
businesses should look to partner with providers who can help them to develop a
foreign exchange solution that meets their needs”
Mr. Murray said that as well as building skills among exporters, it was also critically
important to inject confidence back into the sector’s bloodstream so that companies
will have the courage to spend more on marketing. As part of the study, exporters
were asked whether they would spend more on marketing if they received their full
50% entitlement from the Export Market Development Grants scheme and over 150
said yes. “This is where the Government needs to start. The $50 Million that the
Gillard Government took out of the scheme should go back in immediately and for
the long term, the scheme must be capped at $200 Million and indexed.”
ABN 98 004 378 289
Export House, Level 2, 22 Pitt St, Sydney NSW 2000
Box 1076, Sydney NSW 2001
tel: +61 2 8243 7400 | fax: +61 2 9251 6492 | info@aiex.com.au | www.aiex.com.au
Australia is highly dependent on export earnings for income and jobs. Governments
around the world are spending on an export led recovery when their currency and
interests rates are at historical lows. There has never been a
more important time
for the Australian Government to support its exporters. “They need to act now.”
END
Media Contacts:
AIEX:
Ian Murray, Executive Director
Tel: 02 8243 7440 or 0430 172 458
E-mail: ianmurray@aiex.com.au
Travelex:
Gavin Melvin, Statecraft
Tel: 0401 430 299
E-Mail: gavin.melvin@statecraft.com.au
NEWS 
