Directors Remain Pessimistic as Survey Shows Negative Outlook on Australian Economy

Survey Reveals Directors’ Continued Pessimism Towards Australian Economy

April 10, 2024 TruthUSA

This comes amid a decline in companies’ trust in the government due to new policies and economic uncertainty.

The latest survey from the Australian Institute of Company Directors (AICD) has revealed the latest Director Sentiment Index (DSI), a statistical measure of confidence in the Australian economy. The findings indicate a prevailing pessimistic outlook of the economy among companies’ top management.

While there was a slight improvement in the index, the DSI continued to stay in the negative territory at -19.2.

Through sampling 1,000 of its members, the Institute found that cost of living (40 percent) has overtaken labour shortages (35 percent) as the most pressing economic challenge for directors in the first half of 2024. This is followed by concerns over productivity growth (33 percent) and inflation alongside interest rates (28 percent).

According to the Australian Bureau of Statistics, the consumer price index (CPI) rose by 4.1 percent in the 12 months leading to the December 2023 quarter, though lower than the 7.8 percent in 2022. Meanwhile, all five living cost indexes increased by 4 percent to 6.9 percent during the same period.

The change in directors’ sentiment also indicates an improvement in the labour market condition since the early days of the COVID-19 pandemic recovery, attributed to increased labour supply after the government reopened the borders and resumed the migration flow.

Nevertheless, 85 percent of the respondents still believed that skill shortages existed in the workplace, with a third of the directors suggesting that the labour problem could be solved via the adoption of artificial intelligence systems and automation.