First-quarter export confidence index down

First-quarter export confidence index down

The Jakarta Post, Jakarta

The country's export confidence index in the first quarter of
2003 took a nosedive to -3.0 from 10.0 in the fourth quarter of
2002, as many companies missed their revenue targets, a survey
reported.

Carried out by courier service DHL and consultancy firm Castle
Asia, the survey noted that the short-term confidence index level
was the lowest since the survey started in early 2002, and that
more than 50 percent of exporters missed their revenue targets
during the first quarter.

"However, many companies expect this decline to be short-
lived, with 58 percent still expecting to meet their annual
revenue targets for 2003," the survey said, the results of which
were provided to The Jakarta Post late last week.

More than 50 percent of exporters believed that the
appreciation of the rupiah against the U.S. dollar affected
export sales, while 56 percent said the cost of raw materials was
another major factor.

"Their exports become uncompetitive at an exchange rate
stronger than Rp 8,500," it said. Around 40 percent of
respondents expected an exchange rate of between Rp 8,500 and Rp
9,000 at year's end, while 37 percent expected a rate of between
Rp 9,000 and Rp 10,000.

In regards the rising cost of raw materials, 40 percent of
respondents expected an 8 to 10 percent cost increase, 23 percent
predicted an 11 to 13 percent increase and 33 percent expected a
maximum increase of 8 percent.

Apart from the exchange rate and the cost of raw materials, 33
percent of exporters believed that unstable international
political and economic conditions had an obvious impact on sales,
while 77 percent deemed domestic political conditions an
important factor.

In dollar terms, 58 companies expected export prices to remain
stable for the next three months.

Southeast Asia (excluding Singapore) remains the main export
market, with 57 percent of surveyed firms exporting to the
region. Other important markets include Western Europe, Japan,
Singapore, the Middle East and North America.