Increased demand and widespread rain have boosted the outlook for post-farm gate agribusinesses, with the March Quarterly Agribusiness Survey from the National Australia Bank (NAB) showing improved confidence.

NAB’s General Manager of Agribusiness, Khan Horne, said both domestic and export demand have lifted.

“Survey respondents reported an increase in export sales for the first time since March 2008. This is expected to continue, although slowly, because of the high Australian dollar and the pace of global economic recovery,” Mr Horne said.

“Business conditions overall are expected to improve in the short term, underpinned by an ongoing recovery in trading conditions and profitability.

“Employment growth has been positive in the March quarter, although survey respondents are anticipating it to be relatively flat over coming months as businesses take a cautious approach to ramping up production.

“Similarly, capacity utilisation has been and is expected to remain relatively flat. There is also little sign of a sustained recovery in capital expenditure due to the slow recovery process.

“On the supply side, the main constraint to capacity utilisation is lower livestock throughput in the food processing sector,” he said.

Agribusiness respondents’ outlook for business conditions in the next 12 months eased but remained positive in the March quarter.

Demand is still reported as the major concern for agribusiness, with 36 per cent of respondents expecting this to be the main constraint to profitability over the next year.

For 29 per cent of respondents, the value of the AUD remains a key constraint to profitability, with a further 12 per cent concerned about wage costs.

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