Managing on the Edge is the fifth report in an annual series and follows Managing in Uncharted Waters (2012–13), Managing in a Multi-speed Economy (2011–12), Managing in Uncertain Times (2010–11) and Managing in a Downturn (2009–10).
Since the report’s inception five years ago, there have been significant swings in the business community’s mood. In 2009, there was an upbeat and positive ambiance within the business community, particularly among Australian SMEs coming out of the GFC. Business leaders held a very optimistic outlook with bullish growth expectations, even though the rest of the world was in recession and struggling with difficult economic conditions.
This positive and upbeat mood began to shift in the 2010–11 report which found companies less buoyant and more cautious in their economic and individual business outlook.
Managing in a Multi-speed Economy (2011–12) indicated that cracks were beginning to appear beneath the surface of Australia’s multi-speed economy, which, to date, had been largely free of the worst of the global economy’s turmoil.
This year’s report reveals that state of Australian economy has leaders on the edge. Pessimism around the state of the economy continues this year, with 91 percent of Australian business leaders viewing the economy as slowing, stagnant or declining. Just 9 per cent felt the economy was growing. By contrast, a respectable 62 per cent of New Zealand respondents said the economy was growing.
The report’s key findings include:
- Among Australian companies, an overwhelming 91 percent of surveyed leaders viewed the economy as slowing, stagnant or declining. Only 15 per cent of Australian companies expressed optimism regarding their business prospects
- Among New Zealand companies, 38 per cent describing themselves as ‘very optimistic’ about their prospects this financial year, compared with 29 per cent last year. More than half of Kiwi leaders expect growth of more than 10 per cent, compared to only 28 per cent of Aussies.
- Only 41 per cent of SMEs are predicting earnings growth in excess of 10 per cent over the coming year, compared with 76 per cent in 2009.
- In Australia, a growing number of companies are cutting jobs – 26 per cent of businesses, compared with 14 per cent just a year ago. Fewer New Zealand companies are reducing staff compared to last year.
- Across both sides of the Tasman, awareness around productivity metrics was significantly higher than in previous years, when a surprising percentage of managers reported having no measurements in place. Factors cited as being instrumental to productivity improvements included identifying inefficiencies (17 per cent), and improving service (13 per cent).
- Dissatisfaction with the government was at an all-time high among Australian business leaders, with 57 per cent saying they felt the government was working against business, compared with 46 per cent last year. By contrast, just 13 per cent of New Zealand companies feel their government is working against them.