Nearly three quarters of businesses surveyed have been hurt by the dramatic fall in the Aussie dollar.
Business executives expect further declines in sales and profits into 2009 as credit market conditions, a volatile Australian dollar and inflationary pressures impact on prospects.
The latest Dun & Bradstreet survey reveals some 48% of executives have been negatively impacted by changing credit market conditions and three-quarters (73%) have been hurt by the dramatic fall in the Aussie dollar since July. Wholesale businesses have reported the largest swing, with 43% indicating a positive impact in July and 89% now indicating that the dollar is negatively affecting their operation.
Recent downward movements in petrol prices are showing through, with a 42% decline since September in the number of executives negatively affected by fuel costs.
Despite suggestions that inflation is coming under control, executives are indicating that price rises will occur in the March 2009 quarter. Selling price expectations have risen by 34% over the past nine months to reach the highest level ever recorded by the survey. Eighty two per cent of executives indicate that they will raise prices in the New Year.
Despite the gloomy forecast, Dr Duncan Ironmonger, Dun & Bradstreet's economic consultant, says Australia will come through the current global downturn in better shape than most industrial countries.
"The federal government and Reserve Bank have the capacity to stimulate economic growth and have indicated that they will use that capacity as necessary throughout 2009," says Dr Ironmonger.
"If world oil prices remain low, Australians should receive some relief on cost pressures.
"The lower value of the Australian dollar will encourage domestic spending and exports; however, it will discourage imports."