Business owners upbeat despite storm clouds

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The drop in the Aussie dollar, low interest rates and inflation, a stronger labour market and a resurgent residential-construction sector are making business owners upbeat

Australia’s business owners are more optimistic about the business outlook for 2016 than at any time in the past three years.

That’s despite the significant storm clouds of volatile financial markets, falling commodity prices, a fragile global economy and the uncertainties of a federal election.

These are the findings of the latest Australian Industry Group national CEO survey of business prospects in 2016.

Nearly two-thirds of the 250 business owners surveyed expect annual sales to improve in 2016, while overseas sales are anticipated to rise for over a quarter of exporters. Over a third expected to increase their staff numbers.

Ai Group chief executive Innes Willox said the improved outlook reflects favourable developments in the latter half of 2015 – a further drop in the Australian dollar, low interest rates and inflation, a stronger labour market and a resurgent residential-construction sector.

Improving consumer confidence and the positive response to the change in Australia’s political leadership added to the improved outlook in making business owners upbeat.

‘But we are still struggling to establish and sustain significant new sources of growth,’ Mr Willox said, releasing the report on Monday.

‘Businesses are working hard to eke out much-needed productivity gains, but government also has critical roles in supporting confidence, competitiveness, investment and innovation.’

He said in this election year the policy debate needs to focus squarely on several key areas – improving the tax system, investing in skills and education, removing barriers from inflexible workplace-relations arrangements and supporting a faster pace of innovation.

AAP