Asian crisis affects Aussie industries
Asian crisis affects Aussie industries
CANBERRA (Reuters): Australian industry expects the Southeast
Asian economic crisis to have a direct effect on business, with
16 percent of companies surveyed by the nation's largest industry
group expecting a significant impact.
The Metal Trades Industry Association (MTIA) found two thirds
of the 200 manufacturing and construction companies surveyed had
a direct exposure to the crisis.
"Of these, one half have already been affected while many
others are under pressure from reduced export demand, deferral of
projects and the prospect of substantially intensified import
competition in the Australian market," MTIA chief executive Bob
Herbert said on Wednesday.
The survey coincides with continued warnings from some leading
local companies that their profits and overall business would be
affected by the Asian downturn.
Coal miner QCT Resources said in late October that exports may
be affected while property developer, funds management and
insurer Lend Lease Corp said earnings growth from Asia would
slow.
Australia is officially tipped to achieve 3.75 percent
economic growth in 1997/98 but some private sector economists
have estimated that Asia's economic woes could strip up to 1.75
percentage points off growth, especially if the malaise widens to
North Asia which is the destination of a large proportion of
Australia's exports.
About 15 percent of exports go to ASEAN member countries while
up to 50 percent goes to all of Asia, with the difference
explained by huge iron ore and coal sales to the key markets of
Japan and South Korea.
According to the MTIA, a number of companies also saw
opportunities in Asia arising from the crisis, but these would
carry a heightened risk.
The MTIA said 97 percent of companies directly affected by the
crisis expect a deterioration in their exports to Southeast and
North Asia, with 21 percent expecting it to be significant.
As well, 80 percent of respondents plan to revise downwards
their earnings from the Asian region, and seven percent of
respondents, or 13 companies, plan to accelerate relocation
activities due to the competitive advantage the currency
depreciation has given Asian economies, the MTIA said.
A number of leading Australian companies have warned in recent
months that their profits and overall business would be affected
by the Asian downturn.