Despite current economic challenges, companies remain positive and plan to invest, according to new CBA research.
New Commonwealth Bank research indicated almost one in four businesses is purchasing more from local Australian companies in order to overcome supply chain problems than from foreign suppliers.
Despite continuing supply chain issues and rising costs, most businesses maintain a positive outlook regarding purchasing plans.
According to Mike Vacy-Lyle, CBA’s Group Executive many businesses are turning to innovation and investment in order to protect themselves and grow
“Despite the difficult conditions, one out of three businesses plan to innovate and adapt in order to increase revenue, and one out of three expect to see an increase in profits in the next 12 months,” says Mr Vacy-Lyle
Mr Vacy-Lyle says about one-quarter of businesses are purchasing more from local suppliers than from overseas ones.
“Supply chains have been disrupted the most when purchasing passenger vehicles, with nearly half of businesses reporting delays,”
“Businesses appear to be adapting to supply chain issues by adopting new procurement processes and asset management, rather than waiting for the issues to subside,”
Supply chain issues have been reported to have the most significant effect on production, retail, hospitality, and distribution industries.
The construction industry was the most severely hit by rising costs, with 86% of respondents saying that costs would rise. Because of this, businesses in this sector had the greatest desire to implement more efficient systems, processes and lower or restructure their costs and debt.
“Businesses are prolonging the lifetime of current equipment or sourcing cheaper products and brands to overcome supply chain issues,” says Mr Vacy-Lyle
The report reveals that the three main strategies businesses are concentrating on this year to improve their performance are reducing operating costs and debt, enhancing business strategies to boost market competitiveness, and purchasing new equipment, vehicles, and facilities
Demand for finance has remained consistent, with 40% of firms anticipating an increase in funding requirements over the next year, Mr Vacy-Lyle said.
Many businesses are adjusting their approaches to the altering operational environment and investing in new vehicles, equipment, and technologies to improve their organisations over the next 12 months, in an inflationary economy.
