Australia’s ability to diversify its export markets and adapt its products to evolving consumer preferences has become a significant driving force behind the nation’s economic progress, per the inaugural Australian State of Exporters Report 2022.
In the 2020-21 fiscal year, this dynamic approach contributed a value-add of over A$646.6 billion to the Australian economy, equating to an impressive 31 per cent of nominal GDP. This demonstrates the critical importance of such efforts to the country’s growth and prosperity.
The ability of Australian exporters to expand their reach into untapped export markets has allowed them to connect with new sources of demand for their goods and services.
By broadening their customer base, exporters have been able to increase revenue streams, reinvest in their businesses and create fresh employment opportunities for Australians all around the nation.
Furthermore, exporters who have honed their capacity to adapt their products to shifting consumer preferences have remained ahead of the curve, ensuring their offerings remain enticing and suitable to domestic and overseas customers.
The report revealed several notable findings, including that nearly three million people were employed by Australian exporters, thanks to the demand generated by our international trading partners. This translates to approximately 23 per cent of Australia’s labour force.
Exporting companies tend to outperform non-exporting firms, generating an average of 14 per cent more employment and 65 per cent more value added. This translates to an average of ten additional employees per exporting company.
In terms of productivity and wages, exporters tend to perform better than non-exporting firms. On average, exporters are 64 per cent more productive and pay 43 per cent higher wages than non-exporting firms.
Exporting also appears to be linked with a greater likelihood of business survival. Between 2018-19 and 2020-21, exporters were found to be nine per cent more likely to survive the early stages of the COVID-19 pandemic than similar non-exporting firms.
The contribution of service exporters to the Australian economy is noteworthy, as they generated the most value-added and employed a substantial number of people, paying some of the highest wages on average. Among them, education and training exporting businesses employed the largest number of workers on average.
Following the mining industry, services exporters paid the highest wages on average. Within the sector, financial and insurance services, information media and technology, and professional and scientific services paid the highest wages on average.
In terms of productivity, finance and insurance services companies were found to be the most productive on average, generating the highest median labour productivity, followed by wholesale and retail trade. It is important to note that the limitations on service data in BLADE mean that the contribution of service exporters to the Australian economy may be underrepresented in available datasets.
Export markets & diversification
China remained Australia’s primary export market in terms of value, demonstrating the strong economic complementarity between the two countries. However, Australian businesses have also diversified their export markets by seizing new opportunities in other destinations. Following China, Japan, Korea, and the United States were Australia’s top export markets in 2020-21, ranked by export value.
When measured by the number of exporters, New Zealand emerged as Australia’s top export destination in 2020-21, with 16,394 exporters selling to this market. This indicates that exporting to New Zealand may be relatively easier for Australian businesses due to the proximity of the two countries and the shared cultural and consumer similarities.
The United States and China were the second and third most popular markets for Australian exporters in terms of the number of exporters. This likely reflects the fact that these countries are the world’s largest consumer markets.
You can read the Australian State of Exporters Report here.
Source: Australian Trade and Investment Commission