Core arguments and facts of the 2018 Benchmark Report: Dynamic Industries

08 Feb 2018


  • Edmund Tang
  • Australian Economy
  • Benchmark Report

Following my previous post, where I discussed the topic of Robust Growth, I want to look in more detail at another key strength of Australia highlighted in the Benchmark Report – Dynamic Industries.

Australia is a globally successful provider of goods and services in five key industries that are in high demand. Our vast mineral endowment together with our productive efficiency and cutting edge, innovative support industries allow Australia to remain at the forefront of the minerals sector globally. We are also a major producer of clean, green agricultural commodities and premium food. In financial services, Australia has one of the Asia-Pacific region’s largest pools of bank assets, as well as significant wealth management and infrastructure financing expertise. And Australia has been rated as a highly attractive destination for education and tourism.

  • Leader in Energy and Resources. With large reserves of mineral and energy resources, Australia is a world-leading producer of gold, iron ore and uranium, and will soon be the world’s largest LNG exporter. The country was also ranked in the world’s top 15 for solar and wind generation as at 2014 [1].  Australia’s abundant resources and proximity to Asia underpin our position as a major global exporter of mineral and energy resources and products. From 2001–02 to 2016–17, the country’s total energy and resources exports are estimated to have increased more than three and a half-times to over A$200 billion, with the majority of these exports going to Asia. Steady growth in the export volume of most bulk commodities is expected to contribute to higher export earnings over the outlook period (see chart below).


  • Clean, Green Agricultural Commodities. Australia is a major global producer of beef, wheat, wool, barley, wine, sugar, canola, lamb, chickpeas and raw cotton. Demand for Australia’s clean and green agricultural commodities drives the country’s export trade in high-value branded premium products. Our food and fibre exports were worth A$45 billion in 2016, with nine of the top 10 destination markets (62 per cent of total food exports) in the Asian region (see chart below). According to the Brookings Institution, the number of middle-class consumers in the region is forecast to grow to approximately 3.5 billion (65 per cent of the world’s total) by 2030 [2]. 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.

Top 10 Export Destinations for Australian Food and Fibre

  • Strong Financial Markets. Financial services is another sector where Australia has strong capabilities. It has one of the Asian region’s largest pools of bank assets, significant wealth management and infrastructure financing skills, and a growing reputation for fintech expertise. Australia has the world’s fourth largest alternative assets under management, sixth largest managed fund assets pool, eighth largest OTC foreign-exchange daily turnover, ninth largest stock market, and tenth largest debt securities (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. [3]

    Total assets of Australia’s financial markets as of June 2017 were estimated to be almost A$8 trillion – over four and a half times the country’s nominal GDP. The sector has grown on average 9.6 per cent a year over the past two decades, well above the average nominal GDP growth rate of 5.9 per cent. [v] 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.

Global significance of Australia

  • Global Education Hub. Australia is the third most popular destination in the world for foreign students enrolled in higher education. Australia attracted over 550,000 international students in 2016, including to higher education, vocational education and training (see chart below). International education contributes over A$26 billion to the Australian economy each year, with both student numbers and export value in their third consecutive year of double-digit growth.

International Students by Region

  • Significant Tourism Industry. Australia is the world’s tenth largest international tourism market with a 2.6 per cent share of global tourism receipts in 2016, according to the UNWTO. The country benefits more from the contribution of tourism receipts to its GDP than nations such as the USA, France, the UK and Italy (see chart below). In 2016–17 Australia experienced record inbound tourism expenditure, driven by strong growth from China, Japan, India, Malaysia, Hong Kong SAR and other Asian countries. Collectively, the tourism expenditure of the top 10 Asian markets grew by eight per cent to A$22 billion – over half of Australia’s tourism receipts. The outlook to 2026–27 remains robust, with overseas visitor real spending expected to rise by 6.7 per cent a year to reach A$76 billion. China, India, Japan and other Asian nations are forecast to represent around three-quarters of this growth [5] .

Top 15 Global Tourism Receipts Markets

[1] Bureau of Resources and Energy Economics, Australian Energy Projections to 2049–50 , Canberra, November 2014 , Table 10: Electricity generation by energy type (TWh); IEA, International Energy Statistics.
[2] The Brookings Institution, the Unprecedented Expansion of the Global Middle Class: An Update , Page 13, Table 2.
[3] Willis Towers Watson Pension Assets Study 2017.
[4] Reserve Bank of Australia Statistics, B1 Assets of Financial Institutions (updated 3 October 2017); ABS, Cat. No. 5655.0 Managed Funds, Australia, June 2017, Table 1 (released 7 September 2017).
[5] Tourism Research Australia, Tourism Forecasts 2017, Tables A1 and A12 (released 2 August 2017).