CEOs wary of year ahead

Many of Australia's CEOs are anticipating a general deterioration in business conditions over 2015, according to a survey published today by peak industry association, Ai Group.

The 56-page report, Searching for Growth, surveyed 352 Australian CEOs in the manufacturing, mining, construction and services industries in late 2014 to gain a picture of their expectations for the year ahead.

The survey found 38 per cent of the CEOs thought business conditions would worsen in 2015 while only 24 per cent tipped an improvement, with a further 38 per cent believing conditions would stay the same.

Lack of customer demand was cited as the biggest impediment to future growth, followed by wage pressures and competition from imports and online.

Respondents did, however, point to an expected increase in sales revenue and employment, along with a slight lift in business investment. A significant increase in productivity gains has also been flagged.

The Chief Executive of Ai Group, Innes Willox, said the survey's findings highlighted a general feeling of uncertainty as Australia's resources sector cools.

"It is clear from the findings of this broad survey of industry leaders that as the mining investment boom fades and commodity prices retreat, the Australian economy is struggling to achieve the rebalancing that is so clearly required," he said.

"The recovery in housing construction has been a welcome boost, but it is clearly not enough to support widespread growth across the economy either in terms of industrial or geographic diversity."

Mr Willox said strong leadership was needed to guide the economy's transition to a future position of strength.

"A major implication for policy-makers from the CEO's 2015 outlook is that Australia is struggling to unearth the new sources of growth needed to re-energise and rebalance our economy," he said.

"While businesses are working hard to grind out productivity gains and are striving to find new and additional revenue sources, governments also have critical roles to play – to improve confidence and to help create the conditions for more decisive improvements in business competitiveness."

Click here to read the survey's findings.