New research from OFX and CoreData reveals a lack of confidence in the economy is costing Australian SMEs billions in cross-border trade deals.
The OFX Cross-Border Confidence Index explores the confidence of small to medium enterprises (SMEs) in the local and global economies, organisational challenges and opportunities in cross-border trade and how these opportunities can be properly leveraged.
The confidence deficit – driven by concerns over foreign exchange rates and an uncertain economic future – means an estimated $84 billion in collective revenue is being lost as SMEs hesitate to access cross-border markets and growth.
In the construction industry, 35.6 percent of SMEs feel "somewhat unconfident" about the predicted state of the local economy over the coming six months. This is on par with general confidence levels, but stands in stark contrast to the confidence displayed by construction SMEs engaged in cross-border trade. Of these, 50.3 percent are more confident than they were 12 months ago.
Cross-border trade opportunities are only expected to get better for construction SMEs over the next six months.
So what can construction SMEs do to make the most of this potential?
"In order for SMEs to take advantage of this opportunity, they need proper support," says OFX CEO Skander Malcolm.
The research points to two barriers that construction SMEs need support to overcome: uncertainty in international markets and lack of knowledge/resources. Companies are wary of being ripped off on fees and unsure how to read the international market in order to secure the best returns.
"They need the ability to navigate uncertainty, have quick access to information and troubleshoot issues by speaking directly to an expert who can help them to manage currency volatility. Understanding how to plan for market movements, create certainty and save money on international payments can make cross-border trade a growth-driving reality for any business," says Malcolm.
Malcolm says that by working with a team that can ensure a transparent fee structure and locked in rates in advance, construction SMEs can feel confident in cross-border endeavours.
The research comes at a critical time for the industry, with construction work in Australia predicted to decline over the next five years.
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