Business leaders across Australia are cautiously optimistic about the economy, according to our 2023 Business Leaders Outlook survey. More than half have a positive outlook about the global (59%) and national (59%) economies.
Still, 46% of Australian business leaders said they expect a recession in 2023. While sentiment about the likelihood of a recession is lower in Australia than in the United Kingdom (69%), the United States (65%), India (61%), Germany (59%) and France (53%), it represents a sizeable portion of business leaders.
Rising costs in general—and energy prices in particular—continue to weigh on Australian businesses. Two-thirds of the companies experiencing inflation said energy prices are their biggest challenge; next in line are the increased cost of capital (61%) and supply chain issues (60%).
Despite the inflationary challenges, the majority of leaders are confident in their own companies. A commanding 94% expect their revenues to increase or remain the same in 2023.
Economic outlook for 2023
Global economy: Optimistic 59%; Neutral 19%; Pessimistic 22%
National economy: Optimistic 59%; Neutral 23%; Pessimistic 19%
Local economy: Optimistic 62%; Neutral 26%; Pessimistic 13%
Industry performance: Optimistic 75%; Neutral 18%; Pessimistic 8%
Company performance: Optimistic 78%; Neutral 15%; Pessimistic 8%
Business expectations
Revenue/sales: Increase 77%; Remain the same 17%; Decrease 7%
Profits: Increase 74%; Remain the same 18%; Decrease 9%
Capital expenditures: Increase 61%; Remain the same 26%; Decrease 14%
Credit needs: Increase 70%; Remain the same 23%; Decrease 8%
Business challenges
Business leaders in Australia face a number of challenges today. Among them: persistent inflation, high energy prices, snarled supply chains and a shortage of available workers.
Top ways companies are adapting to inflation*
Automating processes: 43%
Raising prices: 43%
Changing pricing model: 42%
Making changes to purchases: 37%
Prioritising most profitable products: 35%
Reallocating cash investments: 33%
*Among respondents who indicated they are experiencing inflation.
What’s driving up the cost of doing business*
Energy prices: 67%
Rising interest rates: 61%
Supply chain: 60%
*Among respondents who indicated they are experiencing inflation.
Top responses to the labour shortage*
Offer flexible hours: 54%
Flexible work location: 51%
Offer upskilling/training: 51%
Increase wages and/or benefits: 49%
Invest in automation: 45%
*Among respondents who indicated they are planning to increase staff or maintain their current headcount.
Top external business threats
Cybersecurity and fraud: 20%
Energy prices: 19%
Competition: 15%
General market volatility: 15%
Interest rates/access to capital: 14%
Local currency volatility: 10%
70% are considering investing in renewable sources of energy as a result of rising energy prices.*
*Among respondents who listed energy prices as their top external threat.
Cyberattacks experienced in last 6 months
Security of data causing integrity concerns: 42%
Data breach: 34%
Malware (including ransomware): 32%
Crashing of your company’s online services or site: 31%
Business email compromise: 30%
Social responsibility
Top areas of focus within corporate responsibility: Social 57%; Diversity, equity and inclusion 57%; Environmental 51%
Top objectives motivating corporate responsibility*
Improve employee retention: 52%
Build company culture: 50%
Enhance marketing & reinforce company’s position in community (tie): 45%
*Among respondents who indicated they plan to focus on an area of corporate responsibility in 2023.
Business transitions and growth plans
Plans for business transfer
Yes, full transfer: 21%
Yes, partial transfer: 19%
Timeline to transfer business*
Within the next two years: 72%
Two or more years from now: 28%
*Among respondents who indicated they have a full or partial business transfer plan in place.
Growth strategies for the next 12 months
Expand into new distribution channels: 53%
Expand into new domestic markets: 51%
Introduce new products/services: 44%
Focus on most profitable products: 36%
Expand into new international markets: 35%
About the survey
Started in 2022, the J.P. Morgan Business Leaders Outlook: Australia survey is a snapshot capturing the concerns and expectations of senior business leaders whose companies have annual revenues between AU$20 million and AU$2 billion.
This year, 200 respondents completed the online survey between 21 November and 8 December 2022. Results are within statistical parameters for validity; the error rate is plus or minus 7.0% at the 95% confidence interval.
Who took the survey
CFO: 47%
Other C-level: 27%
CEO/chairman/chairwoman: 13%
Owner/founder: 9%
Other: 4%
Company size by number of employees
1-49: 2%
50-99: 6%
100-249: 12%
250-499: 19%
500-999: 20%
1,000-4,999: 34%
5,000+ : 9%
Company size by annual revenue
AU$20mm-$100mm: 53%
AU$101mm-$499mm: 25%
AU$500mm-$1b: 13%
AU$1b-$2b: 10%
Company by industry
Government 3%; healthcare 7%; higher education 2%; home services 6%; industrials 7%; manufacturing 25%; media/entertainment/advertising 2%; nonprofit 1%; oil and gas 4%; other professional/non-finance 5%; real estate 2%; restaurants/food services 4%; technology 9%; transportation/logistics 4%; wholesale/retail 21%; other 2%
Note: Some numbers may not equal 100% due to rounding.
Contributors
Robert Bedwell
Chief Executive Officer, Australia and New Zealand J.P. Morgan
Lindsay Atkinson
Head of Commercial Banking Treasury Management, Australia J.P. Morga
Annabelle Mooney
Head of Commercial Banking, Australia and New Zealand J.P. Morgan
Oliver Bareau
Head of Private Banking, Australia J.P. Morgan
JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/cb-disclaimer for disclosures and disclaimers related to this content.
