Australian exporters show record low confidence level, says DHL
A study by DHL revealed that only 47% of Australian exporters are confident that 2021 will bring a likely increase in export revenue. This figure marks the lowest confidence level since 2003, even lower than the 48% recorded level in 2011 following the global financial crisis.
The DHL Export Barometer 2020, released on 2 December 2020, revealed that 57% of exporters reported a decline in revenue in the last 12 months. In the same period, however, 1 in 5 (22%) export businesses experienced increased revenue. Additionally, 7% of the same group saw a significant increase in revenue.
Gary Edstein, CEO and Senior Vice President of DHL Express Oceania, noted on the increase and resilience of exporters in a statement.
“Although the challenges of this year has had a significant impact on overall exporter confidence, Australian export businesses have once again displayed their ability to pivot strategies to maintain and in some cases even increase export orders and revenue,” said Edstein.
He continued that this resilience is further reflected in the portion of exporters predicting business revenue to stabilise within the foreseeable future.
Exporters confident in business recovery by end of 2021
Despite drops in export orders and overall confidence this year, 57% of Australian exporters are projecting an expected return of revenue to pre-pandemic levels before the end of 2021.
Exporters were surveyed for the reasons they think will likely to drive revenue recovery, which are as follows:
- increased demand from new or existing customers (54%)
- increased sales and marketing (31%)
- new products or services (26%)
- focus on new markets (24%)
- better economic conditions in key markets (16%)
Investing in e-commerce brings returns for exporters
With the boom of ecommerce this year, 74% of exporters reported generating orders or enquiries via online channels.
This year, 1 in 3 (32%) businesses reported a decline in online export orders. Meanwhile, 21% reported that e-commerce channels brought increases to export orders.
Of all exporters, 40% stated they are taking no action to drive online orders, up from 22% in 2019 – participation in all e-commerce growth strategies fell this year.
The report shows that export businesses which reported increases in revenue this year were more likely to actively participate in strategies to grow online orders.
- Top strategies included:
- improving website design (43%)
- more spend on online marketing (35%)
- and offering free or discounted delivery (26%)
Export expansion plans impacted by fall in 2020 revenue
New Zealand remains the top export destination for Australian exporters, with figures showing growth from 68% last year to 73% of trade engagement across the Tasman. The North America region held second place despite dropping to 39% from 52%. The South East Asia region was the third most popular destination (36%), up from 29%. Trade with the UK fell from 35% to 23%, while Europe dropped 6% to 30% this year.
Looking to the coming 12 months, two in three (65%) exporters stated they had no plans to expand into new overseas markets, an increase from 51% the previous year. This trend was observed most amongst exporters who reported a decline in export revenue this year – 70% stated they did not plan to expand in 2021. Among those who did indicate an intention to invest in new markets, the most popular target destinations included New Zealand (11%), South East Asia (10%) and the UK (10%).
The number of exporters experiencing barriers to trade, such as exchange rates and tariffs fell this year, with 41% reporting no challenges apart from pandemic-related issues. In light of the pandemic, the most common barriers encountered by exporters included delays and disruptions to freight deliveries (54%), increase in cost of freight (51%), temporary closure of local business operations at destination (29%), and lack of demand from customers (28%).