Australian Business Leaders Express Tempered Optimism Amid Persistent Inflation and Uncertainties Ahead, Annual J.P. Morgan Survey Finds
16 Januar 2024 - 11:00PM
Business Wire
Midsize businesses cited cybersecurity, the
competitive environment and weakening consumer confidence as top
challenges for the year ahead
Optimism for the year ahead has climbed among Australian midsize
business leaders, with nearly seven-in-ten reporting confidence
about the global (69%) and national (68%) economies, up 10% and 9%
respectively from 2023, according to J.P. Morgan’s third annual
Australia Business Leaders Outlook survey.
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Recession expectations for Australian
midsize business leaders (Graphic: Business Wire)
With this confidence, growth is top-of-mind for Australian
midsize businesses as a majority expect to see an increase in
revenues (82%) and profits (78%)—and also plan to boost capital
expenditures (73%, up 12% from 2023) and add headcount (56%).
Balancing the hopeful outlook on the horizon, 59% reported bracing
for a recession in 2024 or believe the economy is already in one,
up 13% from 2023.
“Australian business leaders are clear-sighted about the
challenges ahead, while finding confidence in their resilience and
experience navigating uncertain economic environments,” said
Elizabeth McAlpine, Head of Commercial Banking Industrials and
Consumer Coverage, Australia and New Zealand, J.P. Morgan. “While
they remain focused on driving growth amid a potential recession,
it’s clear they expect a soft landing and are feeling hopeful
looking to the future.”
The survey of more than 200 C-suite executives found that more
Australian midsize companies are looking to expand internationally,
while remaining focused on managing the rising costs of doing
business. More than half plan to drive business growth through
expansion into new distribution channels (54%) and/or new
international markets (53%, up 18% from 2023). These plans are in
spite of 74% reporting costs continuing to rise due to
inflation.
“Even as they contend with economic headwinds, Australia’s
business leaders remain cautiously optimistic as we enter 2024 and
will continue to focus on harnessing opportunities for growth and
international expansion,” said Robert Bedwell, Chief Executive
Officer, Australia and New Zealand, J.P. Morgan.
Riding the Waves of Ongoing Challenges Australian
business leaders indicated cybersecurity and fraud concerns as the
most significant challenge they’re facing, closely followed by high
competition and weak consumer confidence.
- Nearly one-third of Australian business leaders (28%) indicate
cybersecurity and fraud concerns as one of their major challenges
anticipated for 2024—ranking higher than U.S. (13%), U.K. (20%) and
Germany (18%) survey respondents.
- The competitive business environment (28%) and lack of consumer
confidence (26%) are also cited as top challenges Australian
business leaders are facing, along with managing cashflow (24%) and
the impact of rising interest rates (24%).
Getting Creative with Financing to Fuel Growth In line
with expectations for growth, more than three quarters (77%) of
Australian business leaders surveyed expect their credit needs to
increase in 2024, up 7% from 2023. While bank lines of credit
remain the most common source for financing (66%), the results show
an increased reliance on other sources of funding.
- Both venture capital (44%, up 11% from 2023) and private
placement of debt or equity (44%, up 11% from 2023) saw rises as a
source of financing.
- Nearly half (47%) say they plan to add direct lending or
private credit to their financing mix in the year ahead, up 15%
from the year before. This is also significantly higher than their
counterparts surveyed in other markets (U.S.: 8%, U.K.: 34%,
France: 33%, Germany: 37%, India: 34%).
Embracing the Possibilities of Artificial Intelligence
Australia’s midsize business community is finding ways to leverage
the rapid advances in artificial intelligence (AI) tools, such as
generative AI and language processing software.
- Nearly nine-in-ten (86%) local business leaders saying they
already use or are considering using AI for their business.
- Of those already using or considering using AI, over half are
already using AI in financial management or accounting (52%),
product development (51%) and business operations (49%).
For more information on the 2024 Australia Business Leaders
Outlook survey, visit
jpmorgan.com/business-leaders-outlook-AUS.
Survey Methodology J. P. Morgan’s Australia Business
Leaders Outlook survey was conducted online from 16 November – 13
December 2023. In total, 209 business leaders (CEOs, CFOs, heads of
finance and owners) from Australian midsize businesses (annual
revenues generally ranging from $20 million to $2 billion AUD)
across various industries participated in the survey. Results are
within statistical parameters for validity, and the error rate is
+/- 6.6% with a 95% confidence level.
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J.P. Morgan Australia, Katie Cooper, katie.cooper@jpmorgan.com
J.P. Morgan Commercial Banking, Bentley Weisel,
bentley.r.weisel@chase.com
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