Where have all the Chinese enquiries gone?
FOR A customs broker, this is one of the busiest periods in the calendar. But this year, it was simply not as crazy. And the downturn has continued into the New Year. We’ve seen less uptake, less enquiry over future shipments.
So, where have all the Chinese enquiries gone?
In my line of work, I can say confidently that when enquiries drop off, discretionary spending has dropped and consumer confidence is low.
The newspapers are now beginning to write about Australian household debt overload. We are also seeing a downturn in confidence as a result of early election reporting.
The Aussie dollar is very low and continuing to dive with little cause for positivity. Variable mortgage rates are on the rise again, without RBA support.
I have read in newspapers that Australian sentiment is often more negative than our less developed Asian neighbours and even our neighbouring powerhouses, China and India.
I have read that we are unnaturally pessimistic. But I disagree. It is right to be concerned. Enquiry is down. Economic outlook is not positive and Australian importers are feeling the pinch again.
They’re just not talking about it yet.
According to the Australian Bureau of Statistics, November 2015 saw a downturn of approximately $1 billion in imported goods from China (excluding SARs and Taiwan).
Before November there had been growth of $200-600 million month on month for six months. Into 2016 the figures have continued to fall in both January and February.
The ABS’s January report key points state that “in seasonally adjusted terms, goods and services debits fell $320m (1%) to $28,487m.
Intermediate and other merchandise goods fell $92m (1%), capital goods fell $83m (2%), consumption goods fell $81m (1%) and non-monetary gold fell $37m (10%). Services debits fell $28m.”
While 1% doesn’t appear to be much, I have felt it in my business, which means my clients, predominantly SME importers, are absolutely feeling it in theirs.
Plus I see additional pressures impacting the bottom line of my clients, making the climate even tougher:
- They are regularly being overcharged on Australian Port Charges by suppliers.
- They are charged duty in US dollars, making importing even less affordable at present.
- They don’t manage their imports to gain maximum value because there are simply too many rules and too much to know for the average SME business.
At a time when confidence is low, it is critical for businesses to better plan for, and execute, cost-effective importing and exporting.
Businesses are urged to know the rules, capitalise on positive opportunities for low-value imports under the tax free threshold and make the most of every saving possible until the storm passes.
PETER McRae* –
April 14 2016
*Peter McRae is CEO of Platinum Freight Management.
Lloyd’s List Australia – From the print edition April 14, 2016