Australia’s dynamic industries drives trade and investment
16 Apr 2019
Australia’s robust economy is testament to the country’s dynamic industries, which are supplying high-quality, in-demand products and services to the world.
Australia is a world-leading producer of energy and resources, agricultural commodities and premium food. The nation is a favoured destination for international tourists and students. It is also home to a large, expanding and sophisticated financial market, including the world’s sixth largest pool of managed fund assets.1
Leader in energy and resources
Australia has the world’s largest reserves of iron ore, gold, lead, zinc, nickel, rutile and zircon, and the second largest bauxite, cobalt, silver and copper reserves. Australia also has the world’s largest uranium reserves and the second largest brown coal deposits, making it an important supplier of the world’s energy needs.
Helped by a weaker Australian dollar in 2018–19 and higher prices for its major commodities, Australia’s resources and energy export earnings are expected to hit a new record of A$278 billion. This is more than quadruple the export value (A$67 billion) in 2004–05 when the mining boom began. Australia’s resources and energy export volumes are projected to grow strongly (across the board) over the next year, before peaking in 2021–222 (see chart below).
Clean, green agricultural commodities
Australia is a major global producer of beef, wheat, wool, wine, barley, lamb, raw cotton, sugar, canola, live feeder/slaughter cattle and chickpeas. In 2017 (the latest data available), our food and fibre exports were estimated to be worth A$51 billion, with nine of the top 10 destination markets (63% of total food exports) in the Asian region (see chart below).
According to the Brookings Institution, by 2030 almost nine in 10 new middle-class consumers (around 1.5 billion) will live in Asia.3 Australia’s proximity to Asia and reputation as a safe and reliable source of quality produce and premium products ensure the country is well placed to capitalise on this growth.
Global education hub
Australia is the third most popular destination in the world for foreign students enrolled in higher education. The country attracted over 620,000 international students in 2017, including to higher education, vocational education and training (see chart below). International education contributes over A$30 billion to the Australian economy each year, with both student numbers and export value in their fourth consecutive year of double-digit growth.
Significant tourism industry
Australia attracted 9.3 million short-term international visitors in the year ending December 2018, according to data published by the Australian Bureau of Statistics (ABS). Tourist arrivals – which involve stays of less than one year – have increased by a compound growth rate of 7.3% a year between 2013 and 2018.
The Asia-Pacific region is Australia’s largest source of in-bound tourism. Countries in the region accounted for 11 of our top 15 tourism markets, and 5.7 million sightseers in 2018. The number of arrivals from these 11 markets has risen by 8.5% per year over the past five years and now accounts for 61% of total overseas tourist arrivals in Australia.
Australia is the world’s seventh largest international tourism market based on its 3.1% share of global tourism receipts (US$42 billion out of US$1.3 trillion, see chart below). The ABS estimates that tourism contributed 3.2% or A$55 billion to Australia’s total GDP, based on the latest ABS Tourism Satellite Account data available.
Strong financial markets
Financial services is another sector where Australia has strong capabilities. Australia has the world’s sixth largest managed fund assets pool, eighth largest over-the-counter (OTC) foreign-exchange daily turnover, ninth largest stock market, and tenth largest debt securities market (see chart below). The managed funds sector is underpinned by a mandated retirement savings scheme (superannuation system) that has resulted in the fourth largest pension pool in the world.4
As of June 2018, the total assets of Australia’s financial markets were estimated to be worth about US$6.3 trillion (A$8.5 trillion) – over four and a half times the country’s nominal GDP. The sector has grown on average 9.4% a year over the past two decades, well above the average nominal GDP growth rate of 5.9%.5 The strength of the financial industry means it is Australia’s largest contributor to gross value added, one of its highest growth sectors and a significant source of capital.