Many companies believe an upturn will be well under way by the first quarter of 2010.

Despite tough current business conditions, many companies believe an upturn will be well under way by the first quarter of 2010, with one in six companies already experiencing an improvement.

According to an Australian Industry Group/American Express report released this week, a survey of 500 businesses revealed the full impact of the Global Financial Crisis (GFC), with almost 60% of companies reporting a decline in sales, 56% claiming to have reduced staff numbers and 32% reducing investment over the past six months.

"The survey underlines the resilience of Australian businesses who are trying to look ahead and plan for growth despite the continuing toughness of business conditions which are highlighted in the survey," says Australian Industry Group chief executive Heather Ridout.

Australian businesses are expecting to use the coming upturn to improve sales of current products and services, develop new domestic markets and introduce new products and services.

Eighty percent of businesses stated improved domestic demand will stimulate discretionary spending. This was followed by improved overseas demand, reductions in government regulations and lower finance costs.

Developing new products, skills development and training, capital investment in plant and equipment, and research and development were all named as priorities for discretionary spend as the economy recovers.