Forklift News - Australia still a business haven

Real GDP growth is expected to reach 3.0% in 2008 and 2.7% in 2009.

Australia continues to be a safe haven for business, maintaining the third-highest rating on the Dun & Bradstreet Global Risk Indicator.

"Despite the impacts of the liquidity crisis and local economic challenges such as inflation, Australia has managed to retain its DB1c ranking," says D&B chief executive officer, Christine Christian.

"This is a positive sign; however, with economic conditions expected to remain challenging, businesses cannot afford to ignore any warning signs that fiscal circumstances could impact customers or suppliers and ultimately cause financial distress.

"A thorough understanding of all credit partners coupled with timely global economic data could prevent business executives from a significant amount of pain."

Meanwhile, the outlook for the United Kingdom remains downbeat. The economy continues to slow and two rating downgrades this year have pushed the UK down to DB2a.  The US and UK, which remain the most exposed to the housing market woes, are also at risk of a prolonged economic downturn.

Austria, formerly the number one ranked country, has also been downgraded due to increased macroeconomic and political uncertainty, placing it on par with Australia with a rating of DB1c.

While ratings for some of the world's most important economies - China, Japan and India - remain unchanged, these countries are not immune to economic challenges and there are signs that difficulties could lie ahead.

China is facing downward pressure on its risk rating due to soaring producer price inflation (near 10%), rising fuel prices and the closure of tens of thousands of factories in recent months.

Japan and India are also facing some economic uncertainty with the increasing cost of goods and real income compression impacting Japanese businesses and consumers while inflationary pressures and tighter monetary conditions in India have slowed economic growth to the lowest rate in three and a half years.

Christian says the latest rankings provide some very important reminders for the business community and Australian policy makers.

"Organisations which are involved in cross-border business or are looking to initiate new trading relationships must have a comprehensive and timely monitoring system in place to ensure they stay in business and ahead of the risk game.

"For policy makers the message is also clear - in a competitive global environment we cannot afford to stand still.

"To build strong trading relationships and attract foreign investment to our shores, we must maintain a low risk rating and stable business environment. This requires ongoing reform and continued strong economic management."

According to the latest information from Dun & Bradstreet's Economic & Risk Outlook Report, Australia is facing some challenges, but the outlook continues to be stable.

The current economic slowdown and continued inflationary pressures have caused D&B to revise its forecasts - real GDP growth is expected to reach 3.0% in 2008 and 2.7% in 2009 while inflation is expected to remain outside of the RBA's target inflation band in 2008 at 3.5% before dropping back to 3.0% in 2009. Unemployment is expected to remain below 5% for both 2008 and 2009.

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