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2011/05 - High Australian Dollar Draws Mixed Response from SME Business Leaders

May 24, 2011

While the strong Australian dollar has been problematic for many businesses, new research has found a large portion of Australian SMEs have benefited.

More than a third (36%) of SME chiefs polled by leading peer-group mentoring organisation, The Executive Connection (TEC), said their business had been affected positively by the strong Australian dollar.

Of the 300 leaders surveyed, only 23 per cent said their business had been adversely affected by the rising dollar, with the remainder (41%) claiming their business had been unaffected.

TEC CEO Chris Gorman said while it was natural that businesses would be affected in different ways, depending on their individual circumstances, it was interesting to see so many SMEs benefitting from the surging Australian dollar.

"There has been a lot of negative sentiment expressed in the media about the strong Australian dollar and its affect on businesses, but these results highlight the flipside," Mr Gorman said.

"It's clear that many SMEs are actually enjoying the buying power of the Australian dollar and taking full advantage of the favourable conditions.

"It's interesting to note that while one quarter (25%) of respondents said they had already adapted their business strategy to account for the high dollar, almost the same number  (23%) indicated they had not yet felt the need.

"With some economists predicting the Australian dollar could reach even greater heights than its recent $1.10 peak, less than half (41%) of TEC CEOs surveyed said they would be concerned about its impact on their business."

Mr Gorman said the volatility of the Australian dollar had highlighted the need for CEOs to develop an adaptable and flexible business model.

"SMEs need to consider market volatility and fluctuating economic conditions more than larger corporation because they are often more vulnerable to turbulence."

But Mr Gorman said the onus was also on regulators to ensure the interests of SMEs, which represent about 96% of Australian businesses, were not forgotten.

"Policy-makers need to be aware that what is good for one business, is not necessarily good for the other and that the significant shift in the value of the Australian dollar will have a profound long-term effect on the structure of Australian business."

Having worked closely with SMEs for 30 years, Mr Gorman said TEC had seen firsthand how an issue can affect SMEs differently to larger corporations.

"One of the main complaints I hear from SME operators is that decision makers tend to neglect their interests. This neglect often contributes to a growing sense of isolation from the rest of corporate Australia," Mr Gorman said.

"That is why networking and the ability to share knowledge among SME peers is so invaluable."

"No one understands the issues faced by SMEs better than SME operators themselves. The knowledge that TEC companies gain from membership allows them to share, learn and ultimately outperform their competitors."

For further information please contact:
The Executive Connection
Diana Terrones
T: 02 9922 2211
E: diana.terrones@tec.com.au

Professional Public Relations
Rob Langford
T: 02 9818 0900
E: Rob.Langford@ppr.com.au