The high dollar, skill shortages, wage rises and the expectation of hikes in interest rates are putting pressure on businesses, a survey by the Australian Industry Group and Deloitte revealed.

The survey, which saw almost 400 companies participate, has identified strategies that businesses are adopting to ensure growth including improving market share, forming alliances, taking part in mergers and adding value to existing products and services.

In addition to these strategies, the surveyed also noted that a number of priority areas where businesses are seeking external assistance to achieve their growth ambitions. These include strategic planning, people management and process improvement.

Heather Ridout, Ai Group chief executive, said that while businesses remain cautious, the survey signals a strategic shift from cost cutting to developing growth strategies and identifying opportunities.

“Businesses consider macroeconomic stability to be a leading priority for government along with reducing red tape, encouraging innovation, coordinating the provision of infrastructure and reforming the tax system including by reducing company tax,” she said.

“Businesses across construction, manufacturing and services continue to face challenging conditions with close to one-third of small businesses recording negative growth over the past twelve months.”

According to the survey, most companies anticipate stronger profits over the next twelve months, with the services sector the most optimistic.
David Murray, national leader Deloitte private, said businesses can sustain their profit growth by managing their cash flow and having credit available to help finance growth plans.

"Winning companies will be those who focus on innovative ways to develop and retain their best people, focus on their profitable clients and increase their market share by merger opportunities or organic growth,” he said.

Murray recommended that businesses also focus on the quality of their products and services so they can differentiate themselves in the market place.

"It will be those businesses which focus on innovative product development that will have a higher chance of actually obtaining the finance to help their future growth,” he said.