Business impacts of Middle East conflict 'not a distant crisis’: CA ANZ

Businesses are facing a squeeze due to widespread economic damage, with 61 per cent of organisations directly exposed to the conflict’s economic impacts, according to CA ANZ.

Further, it was revealed that nearly four in five (77 per cent) of these organisations cited higher energy costs, nearly one in two (46 per cent) said their supply chain was disrupted.

For its research, the body surveyed 700 CA ANZ members whose clients are in industries such as manufacturing, retail, agriculture, logistics, and healthcare.

Production costs were higher for 40 per cent of clients, who also experienced delays in shipping and freight, with 36 per cent saying exchange rate volatility has impacted their operations.

CA ANZ chief executive Ainslie van Onselen (pictured) said: "This is not a distant crisis. It is landing on Australian and New Zealand businesses right now, and our members are seeing it first-hand across every sector of the economy.”

The body’s chief economist, Professor Richard Holden, said higher energy prices don't just hit at the bowser, but push up the cost of food, freight, and manufacturing, meaning everything increases in price.

“Businesses and households are already under pressure. This makes it worse,” he said.

While nearly one in two clients reported monitoring the situation, they said they have still not made concrete plans, reflecting the level of uncertainty in decision making, with one in five (17 per cent) considering raising their prices.

"Government cannot keep governing crisis to crisis. Fuel security, reliable energy and resilient supply chains are the foundations a modern economy runs on. It is time to strengthen them," said Damian Ogden, group executive of advocacy, public and government affairs at CA ANZ.