By Adam Coleman

Industry groups are calling on further action from the Federal Government, following a survey of over 480 CEOs in the manufacturing, construction and services sectors revealed the financial crisis is ‘placing business expenditure on key growth drivers at risk’.

The survey by Australian Industry Group (Ai Group) and Deloitte, the National CEO Survey – Business prospects in 2009, discovered that while Australia has up until now fared much better than the rest of the world, it is starting to experience a significant slowdown.

Ai Group Chief Executive, Heather Ridout believes 2009 will be one of the toughest years in decades and said “policy-makers will need to take further action beyond that already taken”.

According to Mrs Ridout, the manufacturing and construction sectors are likely to see total sales and employment decline in 2009.

“While service income from sales and exports will continue to grow all three sectors are facing a very difficult and challenging year, in terms of maintaining sales, jobs and margins.”

She says interest rates should come down in February and called for further fiscal action to support jobs and business profitability.

“In regards to the latter, businesses have indicated an intention to make substantial cuts to discretionary spending, in areas such as training, R&D and investment in plant and machinery, and refocus their energy more directly on coping with the expected decline in sales and demand and managing their cash flow.

“Given these expected cuts to business discretionary spending, it is vital that the Federal Government introduce additional measures directed at reinforcing the investments in future performance which are currently under jeopardy. As well, the Reserve Bank must continue to lower the cash rate,” Mrs Ridout said.

To read what CEO’s were saying in the survey click here.