Investor Update: September 2011 International Data Comparisons (IDC)

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September 2011 International Data Comparisons (IDC)

26 September 2011

Download Austrade’s International Data Comparisons (IDC). It is an easy-to-read comparison of Australia’s performance and position across key economic and financial related indicators. The IDC has been updated to include data effective to 20 September 2011.

Points of interest include:

The 2011 Institute for Management Development (IMD) World Competitiveness Yearbook rated Australia’s economy the second most resilient in the world for the two consecutive years to 2011. For economies with populations greater than 20 million, Australia has topped this category each year since 2008.
Australia ranks third in the 2011 Index for Economic Freedom, with a score of 82.5 out of 100. The survey states that robust supervision and sound regulation enabled Australia’s banking system to cope well with recent financial turmoil. Australia has a strong tradition of openness to global trade and investment and transparent and efficient regulations. An independent judiciary protects property rights, and the level of corruption is low.
In its latest assessment of Australia’s economy, the International Monetary Fund (IMF) sees the economic outlook for Australia as favourable, led by private investment in mining and commodity exports. It expects strong commodity demand to be long lasting because of favourable prospects for sustained growth in Asia, including China. The IMF said in its World Economic Outlook September 2011 that recent natural disasters slowed growth only temporarily in Australia, and now projects that real GDP growth will pick up from 1.8 per cent in 2011 to 3.3 per cent in 2012.
The consumer price index rose by a stronger-than-expected 0.9 per cent in the June quarter for an annual rate of 3.6 per cent, above the Reserve Bank of Australia’s two to three per cent target band. The most significant price increase for the quarter was in fruit, which rose 26.9 per cent. The sharp increase in fruit prices is a result of recent natural disasters in Queensland.
In 2010-11, Australia’s annual export value of goods and services rose by 17 per cent to A$298 billion. The surge was led by minerals, up 48 per cent to A$79 billion, and fuels, which climbed 20 per cent to A$68 billion. Australia’s annual imports also increased by 7 per cent to A$276 billion in 2010-11. Australia recorded a total trade surplus of A$22 billion in 2010-11, a marked turnaround on the A$3 billion deficit of the previous year.
The value of Australia’s merchandise exports rose 10 per cent a year between 2005-06 and 2010-11, primarily due to strong demand for our minerals and fuels in Asia. Of the top ten export markets in 2010-11, eight were from the Asia-Pacific region. Their combined value accounted for 73 per cent (A$179 billion) of Australia’s total export earnings in 2010-11, up from 60 per cent five years ago. Australia’s merchandise imports rose 5 per cent a year between 2005-06 and 2010-11. Of the top 10 import partners, seven were from the Asia-Pacific region, with a total combined value of more than A$100 billion. These accounted for almost half of Australia’s total import bills in 2010-11.
Iron ore exports have grown rapidly with a Compound Annual Growth Rate (CAGR) of 27 per cent between 2005-06 and 2010- 11. Iron ore is Australia’s number one export, with a 28.5 per cent share of total export earnings in 2010-11 valued at A$70 billion. Coal is our second most important export with a total value of more than A$43 billion in 2010-11 and market share of 17.6 per cent. Australia’s merchandise imports have increased moderately with a CAGR of 5 per cent over the past five years. Machinery and transport equipment were Australia’s top two merchandise imports, with a total combined bill of A$89 billion in 2010-11 and market share of 41 per cent.
China was Australia’s largest merchandise export destination with a market share of 23 per cent of our total export value in real terms in 2009-10. This figure was up sharply from 5 per cent 10 years ago and reflects the surge in China’s demand for Australian minerals. India has also emerged as a significant export destination, with a market share of 8 per cent in 2009-10. With regards to market shares of major developed economies, Japan remains important accounting for 18 per cent of exports. The shares going to the European Union and the US have declined to 8 per cent and 5 per cent respectively.
Foreign direct investment (FDI) into Australia grew by 7.5 per cent to A$474 billion in 2010 after an 11.1 per cent increase in 2009. The top five major FDI source countries continue to be the US, UK, Japan, Netherlands and Switzerland. During 2010, FDI from the US jumped 20.4 per cent to A$120 billion, and FDI from China grew by 41 per cent to A$13 billion. Significant growth on 2009 FDI figures has also come from South Korea (up 61.8 per cent), Canada (31.6 per cent), Singapore (22.6 per cent) and Hong Kong (22.5 per cent).
Australia’s world share of FDI, measured in US$, increased to 2.7 per cent in 2010, compared to its 2.4 per cent share in 2009. United Nations Conference on Trade and Development’s (UNCTAD’s) World Investment Report 2011 shows that FDI into Australia was US$508 billion in 2010, up from US$242 billion in 2005. As a percentage of GDP, FDI in Australia rose to almost 40 per cent in 2010 from 31.7 per cent in 2005.