Bosses in manufacturing, construction and the services sector expect economic growth to be solid, albeit uneven, in 2010 after a year of survival in 2009, a new survey has found.
The latest Australian Industry Group (Ai Group)/Deloitte CEO survey expects improving consumer confidence in income growth and employment prospects, rising household wealth and Australia's exposure to China's strong growth will drive the Australian economy this year.
But this will be partially offset by fading stimulus from the federal government, rising interest rates and the dampening impacts of the stronger dollar on exporting and import-competing business.
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"The economy is rebounding and looks to consolidate this year with improving conditions anticipated across manufacturing, services and construction," Ai Group chief executive Heather Ridout said, releasing the report on Monday.
"However, the recovery is uneven, and the rebound will not be as sharp as those that followed previous downturns."
These three sectors make up 90 per cent of the economy.
Manufacturers on average anticipate a 5.6 per cent increase in the nominal value of sales in 2010 to around $415 billion, the survey of 514 CEOs across the three industries found.
Sales in the service sector are forecast to rise 6.6 per cent and by 2.5 per cent in construction.
A further modest improvement in employment is expected, although employers across the sector are concerned about a possible re-emergence of skills shortages as the economy returns to growth and how this will impact on employment and wages.
Manufacturers expect employment to rise 2.9 per cent in 2010, the service sector by 2.3 per cent and by a slim 0.5 per cent in the construction sector.
Spending on research and development (R&D) is expected to be 3.4 per cent in manufacturing, 1.9 per cent in services and 1.2 per cent in construction.
"While 2009 was characterised as a year founded on survival, 2010 offers real opportunities," Deloitte manufacturing partner Damon Cantwell said.
He urged industry to engage with growth markets such as China and India, and to make the most of the support available through government initiatives for R&D and innovation.
