Down but not out.

• Position: NEWS

Australian exporters are cautious but optimistic, according to the latest edition of the DHL Export Barometer. Whilst the high dollar and political and economic conditions globally have taken their toll, the majority of exporters remain positive about the next 12 months. Overall export confidence is still on the positive side of the ledger but it is tower than it was in November 2004.

The exporters surveyed are concerned about the exchange rate, but many are learning to do business effectively even with a relatively high Australian dollar. Furthermore, price rises--particularly in agriculture and mining--have countered some of this exchange rate impact, and most exporters don't regard the exchange rate as an impediment to future investment and global expansion.

Capacity constraints--in terms of infrastructure in ports, rail and roads--are considered to have been important to 25 percent of all exporters over the past year. However, most companies surveyed believe that these impediments are expected to lessen slightly in the year ahead. Exporters also view manufacturing capacity to be a more important issue than infrastructure on the supply side of the economy.

In terms of Free Trade Agreements (FTAs), exporters are generally positive about their potential benefits. Exporters have warmed to the agreements with Thailand and the United States since they became law on New Year's Day. There was also a favourable initial response to possible pacts with Malaysia, the Association of South East Asian Nations (ASEAN) and the United Arab Emirates (UAE) and continued support for an agreement with China. All...