AIBS 2017: A new survey of Australia’s internationally-active businesses

12 Dec 2017

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  • Mark Thirlwell
  • AIBS 2017

A new report produced by the University of Technology Sydney (UTS) and based on data drawn from Australia’s International Business Survey (AIBS) series was released today. The UTS paper provides a detailed look at many of the findings of AIBS 2017.

Supported by Austrade and Efic, managed by the Export Council of Australia (ECA) and conducted by research company amr, AIBS 2017 is the fourth in the AIBS series and once again the set of responses provides us with a set of views and opinions on Australia’s international engagement as reported by the firms that drive it[1]. More specifically, this year’s survey captures the views of 941 internationally-active businesses (IABs) drawn from 19 industry sectors and operating across more than 90 international markets[2]. In addition, AIBS 2017 also reports on the views of a further 127 firms that are not currently involved in international activities in order to interrogate them as to what might encourage them to take up (or return to) international business.

Consistent with previous surveys in the series, the participants in AIBS 2017 were once again generally upbeat about the prospects for their cross-border activities, with 87 per cent of respondents expecting the overall financial outlook for their firm’s international operations over the next two years to be either the same as or better than the outcomes they had experienced during the past two years. In addition, 74 per cent of respondents were also planning to expand their business into additional overseas markets over the same time period.

That reported optimism is consistent with the overall upturn in world trade that got underway in the second half of last year and that has been sustained through much of 2017. Interestingly, that optimistic outlook has also been robust to the two major political events of 2016 – the UK vote for Brexit in June 2016 and the US presidential elections in November 2016. Given that a significant part of the international media commentary around these two events has concerned the potential implications for trade and trade policy, it’s interesting to gauge the extent to which AIBS participants have changed their views on both markets in response to those developments.

In fact, in the case of the Brexit vote, some seventy per cent of AIBS 2017 respondents felt that the vote either made no difference to their view of the UK market or actually made them feel more optimistic (with 51 per cent saying ‘no change’ and 19 per cent opting for ‘more positive’). Only a (substantial) minority of respondents – 20 per cent – reported feeling more pessimistic.

While that captures the view of the overall sample, it includes those firms not currently doing business in the UK. So, what if we were to look just at the responses of those firms already involved in UK-related transactions? For this sub-sample, the overall share saying that the Brexit vote either had no impact or made them feel more optimistic about the UK market turns out to be little changed relative to the full sample – down only marginally to 69 per cent. But this reflects a smaller share of those saying ‘no change’ (now down to 47 per cent) and a partially offsetting rise in optimists (22 per cent opting for ‘more positive’). At the same time, however, there was also a rise in the share of those thinking that the outlook had worsened as a result of the vote, increasing from one in five in the full sample to (more than) one in four in the sub-sample[3].

In the case of the US presidential elections, the results show AIBS respondents feeling a bit less sanguine with regard to the impact on their views on the market. That said, it was once again true that a majority of respondents remained either unchanged or more positive in their views on the US market. In the case of the full sample, about 61 per cent reported that the election outcome had left them with either no change in their views (49 per cent) or more positive than before (12 per cent). On the other hand, 31 per cent reported feeling less positive.

Restricting the sample to those survey participants currently doing business in the US has the result of increasing the reported degree of optimism somewhat. Now, roughly two-thirds of respondents either reported no change (52 per cent) or more positive views (14 per cent), while the share of those saying they felt less positive dropped a little to 29 per cent.Over the coming days, my colleague Divya Skene will post a series of blogs taking a more a detailed look at some of the findings of AIBS 2017. Consistent with previous surveys, this will include a review of the diverse range of activities in which survey participants are engaged, but will also cover the presence of ‘born global’ firms, respondents’ views on Free Trade Agreements and the role of documentation, and an examination of some of the factors that might encourage firms to start participating in international business.

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[1]  Information about the three previous surveys in the series, AIBS 2016, AIBS 2015 and AIBS 2014 is also available from our website.
[2]  The survey was in the field between April and May 2017.
[3]  There was also a decline in the share of ‘don’t knows’ which dropped from nine per cent in the case of the full sample to four per cent for the sub-sample of firms already doing business with the UK.