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DHL Export Barometer 2015


DHL Export Barometer reports highest level of exporter confidence since aftermath of global financial crisis (GFC)

  • Two-thirds (66 per cent) of Australian exporters expect orders to increase over the coming year
  • More than half (53 per cent) of exporters saw increased orders in the past year
  • North America (53 per cent) is creeping up on NZ (57 per cent) as top Australian export destination
  • Australian exporters are supporting the push for FTAs, with ChAFTA seen as positive by 49 per cent and the TPP growing in popularity
  • Weakening Australian dollar has allowed exporters to compete more effectively with overseas companies
  • A growing number of Australian exporters (80 per cent) also import

The 2015 DHL Export Barometer has revealed Australian exporter confidence is at its highest since 2011, as lower exchange rates render Australian businesses more competitive internationally and the positive impacts of free trade agreements are realised. While China leads in expectations of where additional export orders will originate from, forecasts are diversifying with South and Central America also sharing the top spot in this category. Online commerce continues to grow and exporters are branching into a greater number of social media channels to stimulate sales.

Gary Edstein, Senior Vice President, DHL Express Oceania said: “The 2015 DHL Export Barometer shows Australian exporter confidence is on the rise. This year, two-thirds of exporters predict an increase in sales over the next 12 months, an increase of five per cent from last year and a significant improvement following the GFC when fewer than half of Australian exporters had an optimistic view of the coming year.

“The expectation that company performance will improve has also increased significantly since last year, with 58 per cent of exporters predicting higher profitability in the next year. Correspondingly, an increasing number of exporters think the number of employees and wages paid are likely to grow.”

Export destinations diversifying
The 15th DHL Export Barometer found the number of businesses exporting to the Americas (North, Central and South) and Asia Pacific is increasing this year.

Tim Harcourt, J.W. Nevile Fellow in Economics, UNSW & The Airport Economist, explains: “While the Kiwis remain our biggest trading partner with more than half of Aussie businesses surveyed exporting to New Zealand, North America is hot on their heels. There has been a seven per cent leap in the past year to 53 per cent of Aussie businesses exporting to North America, most likely driven by exchange rate movements.

”As Australian businesses future-gaze, China still tops the ladder in terms of projected increases in exporting. However, that rung is being shared with South and Central America where, despite still being a relatively small export market, 56 per cent of exporters predict orders to increase over the next 12 months. A strong trade performance from Pacific Alliance economies in South America likely led to the huge 17 per cent leap in expectation for that region from last year.”

Current sentiment towards ASEAN economies also jumped a significant 13 per cent to 53 per cent of exporters planning to export to that area in the next year, matching expectations to export to the UK. Despite the beleaguered Greek economy, Europe and the Middle East were only slightly behind at 50 and 51 per cent respectively.

Free trade agreements (FTAs) popular with exporters

Generally, the attitude of Australian exporters towards FTAs is supportive, with the perceived and expected benefits continuing to grow.

The newly minted FTA with China (ChAFTA) draws positive expectations among 49 per cent of exporters – and the agreement with Japan has been more beneficial than exporters expected, with actual positive impacts cited at 41 per cent compared to the anticipated 35 per cent in 2014.

Of the established FTAs, the US is leading the popularity contest with 59 per cent of exporters reporting a positive impact on their business in comparison to 55 per cent the previous year and 46 per cent in 2013. New Zealand’s Closer Economic Relations agreement also provided a positive impact for the majority of exporters at 56 per cent, a nine per cent increase on the previous year. AANZFTA (Australia, ASEAN and New Zealand), Singapore and Thailand rounds out the top five with the majority noting a more neutral impact.

The feeling towards future FTAs is improving, with over half (51 per cent) predicting a positive impact should an agreement be signed with the EU, compared to 46 per cent last year. Interestingly, confidence in the much discussed Trans Pacific Partnership (TPP) is growing, with 46 per cent (up from 37 per cent last year and 26 per cent in 2013) expecting a positive benefit.

Export challenges continue

Last year, the strong dollar was considered by exporters to have the greatest negative impact on sales, and this year the tables have turned with the weakening dollar allowing Australian businesses to compete more effectively internationally, despite the increasing costs of raw materials.

In this global era, four out of five exporters (80 per cent) say they both import and export – a jump from 74 per cent in 2013 and 2014.

As the exchange rate fluctuates, exporters are responding by implementing a wide range of strategies, with many focusing on improving service levels to add value.

China is still viewed as the biggest international competitor, however the perceived threat has dropped in the past year amid growing concerns about the threat from the USA (up from 31 to 34 per cent), India (up from 15 to 19 per cent), New Zealand (up from 11 to 13 per cent) and Latin America (up from six to nine per cent).

Online commerce and social media

For exporters, a company website continues to be the main source for generating customer orders, with three quarters of exporters generating sales online. Of those, 55 per cent report increases in their online trade over the past 12 months.

This is the second year the DHL Export Barometer has examined social media use among exporters as the social revolution becomes more prolific, particularly in the South East Asian markets. While only a slight increase was shown in the number of companies using social media to stimulate export sales from last year (37 to 38 per cent), the average number of social channels has increased.

Figures show 71 per cent of Aussie exporters are now using Facebook, 39 per cent using LinkedIn, 32 per cent active on Google+ and 30 per cent tweeting with customers on Twitter. Despite the popularity of the Instagram community among its 200 million plus users, it appears that exporters haven't yet committed to the image led platform for sales generation, although this channel has achieved the largest growth this year (from 18% to 29%).

Tony Boll, CEO, DHL Global Forwarding South Pacific, added: “As online connectedness continues to grow and export orders increase in volume and origin, we hope to see Australian exporter sentiment continue on a positive path over the coming year.”

About the DHL Export Barometer
Conducted by ACA Research, 597 Australian exporters were surveyed for the 2015 DHL Export Barometer between 21 May and 12 June, 2015.

The DHL Export Barometer is an initiative aimed at analysing export confidence in Australia and identifying export trends, and was first launched in November 2003. It is based on nationwide independent research, examining the business outlook of Australian exporters, highlighting changes in overseas market demand and providing insights into the factors impacting on Australia’s export trade.