Strong global demand for Australia’s resources, energy and food

Australia’s primary industries powered export growth in 2020–21. Following a moderate growth of 3.3% in 2019-20, resources and energy exports increased by 6.5% to over A$310 billion in the year to June 2021.

Exports of these two commodities are projects to hit a new record of A$349 billion in 2021-22. Asia's economies are our principal customers.

Investment in Australian critical minerals is growing fast. This is due to soaring demand for lithium-ion batteries, renewable energy plants and high-tech manufacturing. Fresh investment in new mines and processing facilities will create a reliable source of global supply.

Exports of agri-foods also reached a new high of A$49 billion in 2020–21. Beef alone generated exports of around A$8.4 billion in 2021. A national reputation for high agricultural standards and clean, green produce means Australian exporters earn premium prices.

Tourism recovery is underway. Thanks to Australia's high vaccination uptake, lockdowns across states have lifted and international borders have started opening to select countries.

Australia’s A$10 trillion financial sector continued to grow in 2020, with total assets growing 9% per year consistently over two decades.

dynamic industries

Exports underpinned by five key industries

In a typical year, Australian trade rests on five major industries: resources, energy, agriculture, tourism and education. Australia is one of the world’s top three exporters of resources and energy. Australia’s farmers are world leaders in the production of clean, green premium produce. Meanwhile, Australia has large and sophisticated financial markets, with the world’s seventh largest pool of investment fund assets. International student arrivals and international tourism will remain minimal as long as borders are closed. In 2019, around three-quarters of all visitor spend came from domestic tourism, and local visitors are sustaining the tourism industry until international borders reopen.

9_australias_globally_significant_industries

Notes: 1. Inbound students in tertiary education. 2. Agricultural products has been defined as codes 0, 1, 4, 9, 21 to 26 and 29 of the Standard International Trade Classification.
Sources: United Nations, 2020, UN Comtrade Database; Investment Company Institute, 2021, Quarterly Worldwide Mutual Fund Market; Tourism Research Australia, 2021, unpublished data; World Trade Organisation, 2020, World Trade Statistical Review; UNESCO Institute for Statistics, 2021, National Monitoring – Inbound internationally mobile students by continent of origin; Austrade

A leader in new technologies

Australian entrepreneurs and academics work well together. They have pioneered world-class technologies in agriculture, education, financial services and health. Innovation includes the use of blockchain in finance, immersive simulation technologies in education, robotics in medical procedures and the Internet of Things in agriculture. Australia is also recognised as a world leader in silicon-based quantum computing research.

10_australias_tech_credentials

Sources: 1. KPMG, 2020, KPMG Fintech Landscape 2020. 2. FinTech Australia, Australian fintech: leading the world, accessed October 2021. 3. Findable, 2021 Global Fintech Rankings. 4. EY, FinTech Australia Census 2021. 5. Austrade, 2021 EduGrowth: Sector overview and statistics. 6. Frost & Sullivan, 2018, Global Digital Health Outlook. 7. WIPO Patent Statistics, 2021, Total count by applicant's origin (equivalent count) 2030: Growing agriculture into a $100 billion industry. 8. KPMG, 2018, Talking 2030: Growing agriculture into a $100 billion industry. 9. Department of Agriculture, 2020, Drought & Emergency Management: A new focus on agricultural innovation investments to harness collective power of RDCs

Abundant reserves of resources and energy

Australia is a major commodity exporter, with resources and energy contributing almost three-quarters of goods exports in 2020–21. Currently, Australia has the world’s largest reserves of iron ore, gold and uranium. Liquefied natural gas, coal and uranium exports make Australia a major energy supplier to Asian economies. Demand for lithium-ion batteries used in electric vehicles will power Australia's lithium industry. Australia is the leading producer of lithium, and investment is set to surge as customers secure global supply chains.

Austrade-BM-australias-commodity-exports-2019-20

Sources: Department of Foreign Affairs and Trade, 2021, Trade statistical pivot tables; Geoscience Australia, 2021, Australia's Identified Mineral Resources; BP, 2021, Statistical Review of World Energy; Austrade

A major supplier of resources and energy to Asia’s industries

Australia’s resources and energy exports have increased by a factor of five in just 20 years. Asia is the big buyer. Following a moderate growth of 3.3% in 2019-20, exports of these two commodities increased by 6.5% to over A$310 billion in the year to June 2021. Australia’s resources and energy exports are projected to hit a new record of A$349 billion in 2021–22. This is an impressive result amid global economic uncertainties. The improved outlook is underpinned by the success of Australia's vaccine rollout program.

12_australia-resources-and-energy-sector-2002-03-to-2022-23

Notes: 1. Annual value of commodity exports, free on board (fob). 2. CAGR = Compound annual growth rate.
Sources: Department of Industry, Science, Energy and Resources, Office of the Chief Economist, 2021, Resources and Energy Quarterly, September 2021; Austrade

Australia’s surge in solar and wind renewables

Renewable energy accounted for 23% of total electricity generation in 2020 – a record for renewables in Australia. Growth is brisk. Renewables’ share of power generation in Australia has tripled in a decade. In 2019-20, wind power produced approximately 8% of Australian power, solar another 8%, and hydro 6%.

Austrade-BM-australias-renewable-energy-generation-volumes-and world-rankings

Sources: International Renewable Energy Agency (IRENA), 2021, Renewable Capacity Statistics; IRENA, 2021, Renewable Energy Statistics; Department of Industry, Science, Energy and Resources, 2021, Australian Energy Statistics; Austrade

A top agri-exporter to Asian markets

Food and fibre exports reached A$49 billion in 2020–21. Asia is a major customer. Of Australia’s 15 top food markets, 11 are in the Asia region¹, and they account for two-thirds of the nation’s agrifoods exports. With a reputation for high agricultural standards and a well-regulated food industry, Australian produce commands premium prices. Meanwhile, Australia’s network of regional free trade agreements gives Australian growers preferential access to Asian markets.

Australias-top-15 export-destinations-for-food-and-fibre-2020-21-min

Notes: 1. The Asia region is defined as Asia and Oceania.
Sources: Department of Foreign Affairs and Trade, 2021, Trade statistical pivot table; Austrade

A clean, green source of food and natural fibres

Global markets have developed a taste for high-value, branded, premium Australian produce. Beef is the biggest export earner, generating A$8.4 billion of overseas earnings in 2020–21. Australia is also a major exporter of wheat, wool, wine, lamb, barley, canola, sugar, fruit, live cattle, mutton, tree nuts, cheese, raw cotton and chickpeas. Together, these top 15 products contributed almost 70% to the total value of Australia’s A$53 billion of agricultural exports in 2020–21.

Austrade-BM-australias-major-agricultural-commodity-exports-2019-20

Notes: 1. Includes wheat flour. 2. Greasy wool exports shown on a balance of payments basis before 2015–16. 3. Includes malt. 4. Includes buffalo. 5. Excludes cotton waste and linters.

E: ABARES estimate

Sources: Australian Bureau of Agricultural and Resource Economics and Sciences, 2021, Agricultural commodities – Statistical Tables 13 and 17; Austrade

Sophisticated financial markets

Australia is home to the world’s seventh largest pool of managed funds and ninth largest stock market (by market capitalisation of freely floating stocks). The country’s foreign exchange and debt markets are both ranked 10th in the world. Australia’s US$2.5 trillion managed funds sector is underpinned by a mandated retirement savings scheme – called superannuation – that has created the fifth largest pension system in the world.

16_global_significance_of_Australias_financial_markets

Sources: 1. Reserve Bank of Australia, 2021, Assets of Financial Institutions – B1; Reserve Bank of Australia, 2021, Securitisation Vehicles – B19; Australian Bureau of Statistics, 2021, Managed Funds, Table 1; Australian Bureau of Statistics, 2021, Australian National Accounts: National Income, Expenditure and Product, Table 3; Australian Prudential Regulation Authority, 2021, Quarterly general insurance performance statistics; Reserve Bank of Australia, 2020, Exchange Rates. 2. Investment Company Institute, 2021, Research & Statistics, Worldwide Market Data. 3. Standard & Poor’s, 2021, S&P Dow Jones Indices World-By-Numbers. 4. Willis Towers Watson, 2021, Global Pension Assets Study. 5. Bank for International Settlements, 2019, Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets. 6. Bank for International Settlements, 2020, Debt securities statistics; Austrade

Australia’s A$10 trillion financial sector

Australian financial markets are large relative to the overall size of the economy. The total estimated value of all financial assets rose to A$10.2 trillion (about US$7.9 trillion) in the December 2020 quarter. This equates to more than five times the value of Australia’s GDP. The financial sector has grown on average by over 9% per year over the past 20 years, almost doubling its share of the Australian economy. It is now the second largest contributor to the country’s gross value added.3

Austrade-BM-assets-of-australian-financial-institutions-1999-00-to-2019-20

Notes: CAGR = Compound annual growth rate from December quarter 2000 to December quarter 2020.
1. ADIs: Banks, Building Societies and Credit Unions. RFCs: Money Market Corporations, Finance Companies and General Financiers. 2. Other: General Insurance Offices and Securitisation Vehicles. 3. Gross value added provides a dollar value for the amount of goods and services that have been produced in a country, minus the cost of all inputs and raw materials that are directly attributable to that production.
Sources: Reserve Bank of Australia, 2021, Assets of Financial Institutions – B1; Australian Bureau of Statistics (ABS), 2021, Managed Funds – Table 1; Australian Prudential Regulation Authority, 2021, Quarterly general insurance performance statistics – Table 1; ABS, 2021, Assets and Liabilities of Australian Securitisers – Table 1; ABS, 2021, Australian National Accounts: National Income, Expenditure and Product – Table 3; Reserve Bank of Australia, 2021 Exchange Rates; Austrade

A top destination for education and skills training

Australia is the third most popular destination for foreign students enrolled in tertiary education. In 2020, Australia attracted almost 880,000 international student enrolments, which were spread across universities, technical colleges, vocational education training colleges, English language courses and schools. About 80% of students arrived from Asian countries; in higher education about 90% arrived from Asian countries.

Austrade-BM-international-higher-education-enrolments-by-regional-grouping

Note: 1. Enrolment numbers reflect international student enrolments (by country of citizenship). 2. 2020 data contains statistics relating to enrolments in higher education courses in each Australian Higher Education Provider and is correct as the January 2021 release of student data (revised monthly). 2020 data should be interpreted with caution. Under current COVID-19 conditions, an enrolment does not confirm if a student was in Australia at the time of reporting. 3. Excludes enrolments from New Zealand as students do not require an international student visa to study in Australia. 4. ‘Other’ includes enrolments from countries not known or where no further information was provided.
Source: Austrade, 2020, Market Information Package

Domestic-led tourism recovery

Relaxed domestic mobility restrictions in the first half of 2021 led to significant demand for travel, helping the industry while international borders remained closed. In May 2021, spending on domestic overnight trips exceeded pre-pandemic levels by 9%. This was a remarkable improvement from April 2020 when spend was down 91% on a year earlier. However, recent lockdowns in the south-east states have affected this recovery. In August 2021, domestic overnight spend was 59% lower than pre-pandemic levels. However, thanks to Australia’s high vaccination uptake, lockdowns across states have lifted and international borders have begun opening to select countries. Preliminary data on trip rates also indicates that tourism recovery is underway.



Austrade-BM-domestic-and-international-visitor-spend-in-australia-from-2010-to-2019
Sources: Tourism Research Australia, 2021, unpublished data; Austrade