Australian Industry Group and Deloitte conducted the National CEO Survey – Business Prospects in 2009, with industry responses indicating a belief that Australia was getting sucked into the global financial crisis vacuum.Up until now, Australia has relied on China’s rapid expansion to prevent it from being sucked into the GFC; but China’s GDP December quarter results, released yesterday, demonstrated a rapid deceleration in economic growth.From its 13.9% expansion record in 2007, China’s growth sagged to 6.8% for the December 2008 quarter, revealing the once strong nation was being buffeted by the GFC.Closer to home and commenting on the National CEO survey, Ai Group chief executive Heather Ridout said manufacturing and construction sectors were facing declining sales and employment this year. The survey found that CEOs anticipated growth in the construction sector would decline 4.5% in 2009, with a total sales forecast of $145 billion.Employment is expected to sink 5.6% to 920,000. CEOs say there will be expenditure cuts in training, research and development, and declining investment in plant and machinery.CEOs in the manufacturing sector reported they expected exports to fall 5.3% to $84 billion, employment to drop 4.4% and sales to sag 3.1% to around $380 billion.Businesses said they planned to direct their energy into managing cash flow and coping with declining sales and demand, Ridout said.“While a spending spike over the Christmas-New Year period may have helped to put a temporary halt to the deteriorating economy, risks are tilted to the downside, and policy-makers will need to take further action beyond that already taken,” she said.Joining a chorus of industry stakeholders, Ridout said to soften the blow, the Reserve Bank of Australia needed to cut interest rates in February, while the federal government needed to provide further fiscal action to support jobs and business profitability.
