Almost three-quarters of companies say an economic recovery will be “well underway” by the middle of 2010, while one in six already believing that an improvement in conditions is now occurring, a survey finds.
The Australian Industry Group (Ai Group)/American Express report on future intentions contrasts with the past six months, when it found more than half of the businesses surveyed said sales had declined and they had been forced to reduce staff in response to the global financial crisis.
“The survey underlines the resilience of Australian businesses who are trying to look ahead and plan for growth despite the continuing toughness of business conditions which are highlighted in the survey,” Ai Group chief executive Heather Ridout said in a statement on Tuesday.
“Companies have worked hard to take costs out of their business,” she said.
Almost 60 per cent of businesses reported a decline in sales over the past six months, while 56 per cent said they had reduced staff numbers, the report covering 500 firms in the services, manufacturing and construction sectors found.
However, about 40 per cent of respondents expect an improvement by the end of the year, while a further 16.4 per cent see an improvement in the first quarter of 2010 and 16 per cent by the second quarter of next year.
Reducing operational costs was the most cited strategy for combating the financial crisis, with 57.9 per cent of companies claiming it was of high importance.
The most popular revenue strategy was improving sales of current product lines.
Small firms ranked this strategy as the highest (71 per cent) ahead of larger businesses (65.8 per cent).
“They have reviewed and restructured their business strategies, are looking to stgelop new products and markets and have a keen eye on the importance of innovation,” Mrs Ridout said.
The firms surveyed account for total employment of 228,622 people with an annual turnover of $36.4 billion, the survey said.
The report, Looking Toward the Upturn, was released on Tuesday.