Businesses expect the pain of a high exchange rate to intensify over the coming year, with exporters saying they will respond by slashing their investment spending.
The quarterly Aussie Dollar Barometer report from the Commonwealth Bank of Australia (CBA) showed expectations for the exchange rate were in the same direction - upward - in all categories, both importers and exports and for all business sizes from small to large.
"Past pessimism on the Aussie dollar's performance has clearly shifted, with expectations of an ongoing rise consistent across the board," CBA foreign exchange economist Chris Tennent-Brown said in a media release accompanying the report.
But, with the Australian dollar averaging 103.1 US cents when the survey was done, the average expectation for importers was that it would be at 111 US cents by the end of 2013.
For exporters, the average forecast was 108.
Smaller businesses tended to expect a smaller rise.
The smallest, with annual turnover from $5 million to $25 million, looked for something in the 107 to 108 US cent range by the year's end.
Those in the biggest category, with turnover upwards of $500 million, tipped an exchange rate of 113 US cents.
The highest the Aussie dollar has been since being floated in 1983 was 110.8 US cents in July 2011, so businesses expect competitive pressures to be wound up about as tight as they've been for a long, long time.
The upshot of it is that importers expect to boost their investment spending to cash in on cheaper products from overseas.
Of the importers surveyed, 56 per cent say they intend to ramp up their capital spending, while only 21 per cent say they intend to reduce it. It's a different story for exporters. Nearly half - 49 per cent, to be exact - say the high exchange rate is encouraging them to cut their investment spending, while only 11 per cent intend to respond by boosting their investment.
"This trend has become more extreme as the dollar continues to rise, which should see exporters continue to initiate business measures including cutting costs and boosting productivity," Mr Tennent-Brown said.
This rosy view of a dire situation is not restricted to Mr Tennent-Brown. HSBC's Paul Bloxham has also recently proposed that efforts to boost productivity will have a positive effect on the high exchange rate. The view was also put forward to a parliamentary committee by Reserve Bank of Australia governor, Glenn Stevens, in late February.
In his opening remarks to the committee, he said a number of factors - including the looming mining investment peak and severe restraint in public sector spending - were weighing on business confidence.
"It is also noteworthy that in several sectors of the economy a combination of factors is putting pressure on business models, and firms have been responding with an emphasis on lifting productivity and paring back costs," he said.
But how an investment strike by exporters will turn out to be consistent with a surge in their productivity is anyone's guess.