DHL sees strong export recovery on horizon

Australian exports are expected to enter a period of strong recovery according to a recent survey.

The annual DHL Export Barometer released this week reports that 69 per cent of Australian businesses surveyed believe that their export revenue is likely to increase in the coming 12 months, bringing it in line with 2019 levels.

Last year only 47 per cent of businesses anticipated export business to increase, making it a 19-year low.

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.

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 (33 per cent) 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 (48 per cent) 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, 59 per cent expect export revenue to return to pre-pandemic levels by the end of 2022.

This year, more businesses encountered export challenges stemming from government responses to the pandemic which directly and repeatedly affected supply chains.

The increasing freight cost impacted 65 per cent of businesses, followed by supply chain issues such as a shortage of products or raw materials (43 per cent), and international travel restrictions (43 per cent).

“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,” said DHL Express Australia CEO and Senior Vice President Gary Edstein.

“Furthermore, as consumers have taken to e-commerce, export orders and demand for cross-border delivery services have grown exponentially,” he said.

“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, according to Epstein, 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,” he said.

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 pr 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.

In 2021, coinciding with the move to remote work and growth in online shopping, a record 82 per cent of export businesses used e-commerce to generate sales orders, up 8 per cent from 2020.

Small office home office-sized businesses were more likely to use e-commerce, at 86 per cent.

Businesses that reported growth in revenue this year were more likely to employ strategies to drive online export orders.

Looking to 2022, investing in online marketing (40 per cent) is most popular, followed by improvements to website design (34 per cent), fulfilment and delivery (29 per cent), and customer service (26 per cent).