Supply chain disruptions, rising energy costs and tough labor market flagged as key challenges for Australian mid-sized businesses
Sydney, January 10, 2023–(BUSINESS WIRE)–The majority of Australian mid-sized business leaders are grappling with the challenges of rising costs and inflation (71%). Meanwhile, nearly six in 10 (59%) are confident in the global and national economy and expect their revenues (77%) and profits (74%) to increase in the future, according to JPMorgan’s second annual report for Australia. Annual Growth Outlook Survey of Business Leaders.
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2023 Economic Outlook (Graphic: Business Wire)
“Australian business leaders continue to demonstrate their resilience as they deftly navigate various geopolitical and economic obstacles,” said Annabelle Mooney, head of commercial banking for Australia and New Zealand at JPMorgan Chase & Co. New strategies must be adopted and deployed flexibly in response to changing market conditions.”
The optimistic theme was clear in a survey of 200 senior executives at mid-sized Australian businesses, with just under half (46%) of local business leaders expecting a recession in 2023 – reflecting less than Their most recently surveyed counterparts are US (65%), UK (69%), India (61%), Germany (59%) and France (53%).
“As we continue to weather a complex and changing economic environment, Australian mid-sized business leaders have once again demonstrated their ability to move forward and meet the challenges that arise,” said Robert Bedwell, chief executive of JPMorgan Australia and Australia. new Zealand.
Mitigate inflation and supply chain disruptions
Seven in 10 (71%) Australian midsize business leaders have experienced rising costs due to higher inflation, which has had an adverse impact on the global economy. Among businesses facing inflation challenges, more than two-thirds (67%) said higher energy costs, along with rising interest rates and capital costs (61%), were driving higher business costs.
The top ways policymakers respond to inflation are by raising prices (43%), automating more processes (43%) and changing pricing models (42%). To further reduce costs, nearly half (45%) of Australian medium-sized businesses are passing a quarter of their increased costs on to consumers – with eight in 10 (83%) saying they are likely to continue raising prices.
When dealing with supply chain disruptions, less than half of respondents (40%) indicated that stress had gotten worse over the past 12 months, while a third (33%) said it had gotten better. In response to ongoing supply chain challenges, business leaders are allocating more funds to cover increased costs associated with moving products (41%) and moving manufacturing and distribution closer to key markets (41%).
Navigating a tight labor market
Australia’s workforce environment remains a top concern for mid-sized business leaders, with more than half (52%) expecting to increase headcount in the next year. If they are responding to high demand for labor, or those preparing to hire more people, they are:
Offer flexible working hours (54%)
Offer employees flexibility in where they work (51%)
Provide upskilling and training opportunities (51%)
Increased wages and benefits (49%)
Improving the Look of Success Through Corporate Responsibility
Australian mid-sized business leaders are focusing on the importance of corporate responsibility factors in the year ahead, citing social (57%) and environmental (51%) factors as well as diversity, equity and inclusion (57%) as key factors for their businesses The most important elements of the strategy – 14%, 14% and 16% growth over 2022 respectively.
The main outcomes of these corporate responsibility efforts were rooted in improving employee retention (52%) and building company culture (50%), up 4% and 11%, respectively, from last year.
prepare for the future
As Australian mid-sized business leaders prepare for the future, more than half expect to expand domestically into new distribution channels (53%) and new geographic markets (51%), and plan to launch new products and services (44%).
Six in 10 business leaders say they do not currently plan to sell or transfer ownership, a 36 percent increase from 2022. For leaders considering a full or partial transfer, 30% intend to sell to a third party or management team – and 19% plan to transfer to family through gifts, an increase of 12% over 2022. More than seven in 10 (72%) respondents expect the transfer to take place within the next two years.
For more information on the 2023 Outlook for Australian Business Leaders, visit jpmorgan.com/business-outlook-AUS.
JPMorgan’s Outlook Survey of Australian Business Leaders was conducted online from 21 November to 8 December 2022. A total of 200 business leaders (CEOs, CFOs, Treasurers and owners AUD) from mid-sized Australian companies (US$20 million to US$2 billion in annual revenue) participated in the survey. The results were within the statistical parameters of validity with an error rate of +/- 7.0% at a 95% confidence level.
About JP Morgan
JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services company headquartered in the United States of America (“US”) with operations around the world. As of September 30, 2022, JPMorgan had $3.8 trillion in assets and $288 billion in shareholder equity. The company is a leader in investment banking, consumer and small business financial services, commercial banking, financial transaction processing and asset management. Under the JP Morgan and Chase brands, the firm serves millions of clients in the United States as well as many of the world’s most prominent corporate, institutional and government clients around the world. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
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