Aussie Dollar below 80 cents

AU Dollar Below 80 US Cents – What This Means For Local Design

With the AU dollar below 80 US cents, its lowest mark since July 2009, we begin to see a shift in the product development and manufacturing programs within Australia. 

Already, we’re seeing an impact on unit pricing, tooling cost and overall increase in overseas production costs, given the most production and factory contracts generally trade in USD. Projects that were budgeted for manufacture a year ago are now 15-20% higher in cost than forecast. This could however mean a boost for local manufacturing where quite often we find local manufacturers and tool makers are not far off pricing achievable through overseas production, such as China.

Compared to this time last year, the cost of importing product has risen nearly 17%. And, compared to the AU dollar all-time high of 1.10 in July of 2011 the cost of importing is now 28% greater. On projects with tooling budgets upwards of $100,000, that could result in quite a budget blow-out! If local manufacturers are able to take advantage of the low dollar, and keep their costs down, the near future could be a great time for Australian manufacturers, producing locally for both domestic and export markets.

At the other end of the scale, now is a great time for overseas manufacturers to leverage Australian-based design service providers. If you’re considering a new project, it’s a great time to get in touch. Anyway, back to design – we promise not to comment on economics again.