Soaring global oil prices have hit Australian exporters where it hurts with a record low number expecting increased export orders in the next three months, however a growing diversity of export destinations suggest the tough times will be short-lived.
Soaring global oil prices have hit Australian exporters where it hurts with a record low number (38 per cent) expecting increased export orders in the next three months, however a growing diversity of export destinations and a more positive 12 month forecast suggest the tough times will be short-lived, the 2006 DHL Export Barometer has found.
Developed in conjunction with Austrade, the DHL Export Barometer also saw the Middle East shoot up as a key export destination, with 62 per cent 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.
Austrade Chief Economist Tim Harcourt said: "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."
DHL Express General Manager, Australia Harlis Malkic said 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," Mr Malkic said.
Commenting on the surprise Middle East results, Mr Harcourt said: "The rise in the Middle Eastern exports is driven strongly by the United Arab Emirates, 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".
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.
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," Mr Harcourt said.
Mr 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," Mr Malkic said.
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," Mr Harcourt said.