DHL’s annual Export Barometer reveals 69 per cent of businesses expect export orders to increase next year.
Businesses highlighted a range of reasons for expected growth next year, including increases in customer demand, sales and marketing activities, and the launch of new products or services. This optimism extends to the number of businesses that plan to hire new staff (48 per cent) and increase wages (57 per cent) in 2022.
COVID-19 impacts export revenue, but recovery expected in 2022
Reflecting on the previous 12 months, more businesses this year (45 per cent, up 17 per cent from 2020) reported growth in export orders. In terms of revenue, a third recorded a slight or significant increase, with large businesses and businesses selling to consumers more likely to report growth.
Although close to half of the exporters reported a slight or significant decline in revenue due to COVID-19 this year, the proportion was an improvement from 57 per cent in 2020. Exporters based in New South Wales, the Australian Capital Territory, Victoria, and Tasmania were more likely to report a decline in export revenue. For businesses that experienced declining revenue in the past year, over half expect export revenue to return to pre-pandemic levels by the end of 2022.
New export challenges for businesses, with the increased cost of freight most highlighted
This year, more businesses encountered export challenges stemming from the pandemic. The increasing freight cost impacted 65 per cent of businesses, followed by supply chain issues such as a shortage of products or raw materials and international travel restrictions (43 per cent).
Gary Edstein, CEO and Senior Vice President, DHL Express Australia says pandemic-related challenges have impacted more businesses this year.
International travel restrictions that created a shortage in airline cargo capacity in 2020 have created flow-on effects to the cost of freight and the ability of exporters to visit business contacts and manufacturing facilities overseas. Furthermore, as consumers have taken to e-commerce, export orders and demand for cross-border delivery services have grown exponentially,” he says.
“However, Australian businesses have remained steadfast, and it is positive to see more businesses in 2021 reporting growth and 69 per cent expecting further increases in 2022. The pandemic has proved how vital international connections are for sustaining global trade. Businesses with efficient growth strategies, considered target markets and the support of robust logistics networks such as DHL Express will continue to recover into 2022.”
Businesses concentrate focus on export markets, with North America now the main target
This year, the average number of export markets targeted by businesses dropped to 3.8, down from 4.4 in 2019-20. The most common export destinations included: New Zealand (targeted by 58 per cent of businesses), followed by North America (52 per cent), Europe (39 per cent), and the UK (38 per cent). Looking to 2022, the most popular destinations businesses plan to target in their export activities are New Zealand (21 per cent), North America (19 per cent), Europe (18 per cent), and the UK (18 per cent).
In terms of the main export destination for a business, North America took the top position this year, with 27 per cent electing it as the main export market, surpassing New Zealand which ranked first in past years. At 25 per cent, New Zealand was the second main export destination this year.