The Australian dollar over the past six months has maintained a position either above or close to parity with the United States dollar. Irrespective of this rollercoaster ride, in historical terms it continues to be at a high level. A similar trend is evident across most commodities of Queensland’s major trading partners.

The high Australian dollar is affecting areas such as employment, profitability, sustainability and continued growth. In short Queensland businesses are experiencing significant pressure, with more than half of Queensland businesses changing practices due to their concern of decreasing competitiveness. Queensland businesses are reducing manufacturing output, reducing staff, increasing their imports from cheaper overseas markets, sourcing more products online and changing business strategy and target markets.

Negative Impacts

• The majority of Queensland businesses (62%) have been negatively and directly impacted as a result of the high Australian dollar

• The has occurred through exports becoming less competitive, decreased tourism and increased international competition for retailers and import competing manufacturing. Manufacturing and tourism have taken the biggest hits, with big drops in sales, visitor 27 percent indicated they have been negatively impacted through a large drop off in tourism and 24 percent through increased international competition.

• 15 percent have been negatively impacted through other means such as customers moving online.

Positive and Other impacts

• Of those that have experienced a positive impact, the majority (76%) have noted that imports have become cheaper such as retail goods or inputs into end goods or services that are sold.
• Whilst a large number of businesses have not been impacted at all by the high Australian dollar, they have indicated that they do expect to be impacted in the coming months.

Does this mean we’re doomed?

Not at all, but a mindset shift may be necessary. Some businesses have implemented changes including:

• Reducing manufacturing output and changing business strategy
• Increasing their import levels
• Reducing prices to increase sales and improve competitiveness
• Spending cuts and finding extra savings
• Increasing online purchasing
• Changing product range to suit new environment
• Diversifying marketing strategies
• Finding new clientele

There is also government support through grants like Jobs Assist. If you are worried your business is getting left behind, please do not hesitate to contact a business advisor today, to get you back on track.

Source: Chamber of Commerce and Industry QLD

http://www.cciq.com.au/assets/documents/advocacy/CCIQAdvocacy-AustDollar-5.pdf