bogarde73
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This is timely apropos my closing comment above, from SMH Business today:
Rising dollar sends jitters through local manufacturers
"Everyone's got their own pinch point," says Simon Whiteley, one of the many local exporters confronting the danger of a soaring Australian dollar.
For his business, Corex, which manufactures solid plastic sheeting for signage, packaging and construction, the runaway exchange rate is proving a "two-edged sword".
The advantage is that the raw materials he has to import have suddenly become cheaper. But Corex supplies its fabricated products to clients in south-east Asia, China and New Zealand, as well as the domestic market. And if the dollar rises too high for too long, Mr Whiteley explains, overseas customers could start reconsidering their supply chains.
This week, the dollar soared past US80 cents, to a high of 80.66 cents, prompting alarm bells among some business groups and fears that Australian export-exposed businesses will start losing out to foreign competitors.
"For me, the low 70 cents or 60s are great ... somewhere in that band," he says.
"I'm used to having fluctuations, ebbs and flows, but if this level sustained over a long period, that's when you experience the tightness."
According to Innes Willox, chief executive of the Australian Industry Group, US80 cents is "outside of the comfort zone" that manufacturers and other trade-exposed industries have enjoyed in recent years.
"All growth segments across manufacturing and services exports rely on more than just the AUD for their competitive advantage," he said. "But even so, a higher AUD remains an ever-present risk to their recovery and outlook.
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