More than two-thirds of company directors have a strong outlook on the Australian economy despite existing challenges, a survey by the Australian Institute of Company Directors (AICD) revealed.
“Overall, director sentiment is well into positive territory and shows that directors are anticipating a strong recovery,” said AICD chief economist Mark Thirlwell.
“Our respondents are expecting increases in employment, investment, turnover, profitability and wages over the year ahead.”
Broken down by geographical location, the data revealed Western Australians were the most confident in their state economy, with 82 per cent expecting a somewhat strong or very strong outlook over the next 12 months.
In contrast, 30 per cent of Queensland-based directors expressed a lack of confidence, noting that the economic prospects for the Sunshine State were somewhat weak or very weak.
However, problems do exist across the board, including most notably labour shortages, with 63 per cent of respondents noting they have been affected by the issue.
“There are many factors at play that will need a whole-of-government approach to tackle Australia’s skills shortage,” said AICD managing director and CEO Angus Armour.
“Our closed borders saw a lack of migration and backpacker-workers but there are other issues at play, such as considering our education and training priorities.”
Asked to select key issues that should urgently be addressed by the government, directors chose the skills shortage as the second most important short-term priority, right behind climate change.
“Half of all directors believe climate change is a material risk to their organisation, but at the same time 49 per cent see the uncertainty around climate change policy settings as a barrier to achieving climate governance at an organisational level,” said the AICD.
Cyber crime was also identified as a key issue that kept most directors up at night, with just 53 per cent confident in their oversight of cyber threats.
As many as 52 per cent admitted that work from home had complicated their cyber security efforts, but more than half said other areas, such as staff retention and wellbeing, had improved.
“There is a relatively new challenge here for directors as we navigate flexible working arrangements post-COVID,” said Mr Armour.
“Businesses now need to balance the needs of attracting and retaining staff with that of managing cyber risk and overseeing organisational culture.”
