The majority of Australian businesses are confident about their growth prospects in the year ahead with a return to pre-COVID profitability levels expected by the end of 2022.
A survey of more than 7,300 businesses in 14 markets by HSBC found that 65 per cent of businesses in Australia are optimistic they can generate growth over the next 12 months.
On average, local businesses are now anticipating a return to pre-COVID profitability by November 2022.
“Australian businesses are incredibly resilient, as shown by their optimism for the year ahead,” said HSBC Australia head of commercial banking Steve Hughes.
“As our borders reopen, we anticipate that local companies will benefit as workforces and supply chains reconnect with international markets.”
Forty-nine per cent of Australian firms expect revenue to increase by 10 per cent or more in the next year and 89 per cent expect new products and services will be the main driver of growth.
In terms of potential threats to growth, 43 per cent of local businesses raised concerns about a resurgence of COVID-19.
Supply chain disruptions and lower consumer demand and spending were also potential threats, according to around a quarter of businesses.
To combat supply chain issues, HSBC said that Australian businesses expressed a desire to increase international trade, with 48 per cent listing other countries within the Oceania region as potential trade partners and 43 per cent pointing to North America.
About a third of Australian firms said they plan to improve sustainability or set sustainability targets.
The most important sustainability actions for businesses included supporting their local community (43 per cent) and improving human rights (36 per cent).
“The survey results support what we are hearing directly from clients – that sustainability is a key focus across the Australian market,” said Mr Hughes.
“It is clear that one key area being prioritised to help drive this change is the sustainability credentials of their supply chains.”
HSBC also found that 37 per cent of Australian firms are investing in new technology and digital tools to protect against potential threats and 49 per cent expect that enhancements to hybrid and remote working through technology will be key to improving their margins.
