Australia is the 13th largest economy in the world by nominal GDP and has enjoyed a period of sustained economic growth over the last two decades. Australia’s economy is driven by services, which account for around 70% of GDP, while mining and manufacturing account for around 15%. The country has a strong focus on exports, with commodities such as coal and iron ore being major exports to countries such as China, Japan and India. The Australian dollar is also one of the most traded currencies in the world.
According to cheeroutdoor, Australia has a highly diversified economy that is well placed to take advantage of global economic trends. The services sector is well developed, with banking and finance, healthcare, education and tourism all making significant contributions to GDP growth. Australia also benefits from its strong agricultural sector which produces a wide variety of crops including wheat, barley, sugar cane, cotton and wool. Livestock farming also plays an important role in the sector with beef being one of Australia’s biggest export earners.
The mining industry is another major contributor to Australia’s economy with coal being its most profitable export commodity followed by iron ore. Other minerals such as gold and copper are also mined in large quantities while oil exploration is ongoing off the coast of Western Australia. Manufacturing makes up around 10% of GDP with cars and car parts being one of the biggest industries followed by food processing (including wine production), chemicals (petrochemicals) textiles (clothing) machinery electronics and defense equipment being other key sectors within this area.
Australia’s economy has been further boosted by foreign investment which has allowed for modern equipment to be used in factories generating higher quality output for both domestic consumption as well as export markets abroad. The government has also made efforts to encourage start-ups through various tax incentives as well as providing access to capital through venture capital funds which have helped create jobs across various sectors including IT & software development biotechnology green energy solutions etc…
Overall Australia’s economy continues to perform strongly due to its diverse range of industries that are able to take advantage of global economic trends while at the same time ensuring sustainable growth through fiscal discipline low inflation rates high levels of investment into infrastructure projects as well as research & development activities that help create new jobs across different sectors within the country.
Business and Economics
The country has had a high and stable economic growth of just over 3.5 percent since the early 1990s. Unlike almost all other rich countries, Australia was not hit by the long economic recession that followed the global financial crisis of 2008.
From the beginning of the colonial era, the role of Australian societies was to provide raw materials to the mother country of Britain and to welcome immigrants from there. The first significant export commodity was wool from merino sheep imported from Western Europe. Wool was a product that could handle 1840s time-consuming sailing across half the globe. The next sustainable export commodity was wheat, which was increasingly in demand in the UK’s growing industrial cities and which could be successfully grown in south-eastern Australia with its temperate climate. The new steamers facilitated transport and when the Suez Canal was opened, travel times were further reduced.
- Paulsourcing: Top 10 tips for doing business in Australia, covering country profile and market entry requirement.
Gold deposits provided even better income for the colonies for short periods. The first gold rush came in the early 1850s when gold was found in the continent’s southeast, mainly in Victoria. The second gold rush came in the 1890s when large deposits were found in the Kalgoorlie area of Western Australia. By the 20th century, mineral production had slowed down, and mineral exports would not have any significant significance until the 1970s.
Once ships with cold stores were constructed, it became possible to transport fragile foods over large distances. At that time, Australia could benefit more from the extensive pastures and agriculture was given a greater element of breeding cattle for meat or milk production. Agriculture was the foundation of the country’s economy until about 1970; then agricultural products still accounted for nearly half of export earnings. Australia became the world’s largest exporter of wheat and wool and one of the largest of beef and dairy products. This is still largely the case, although less than 11 percent of all income from commodity exports came from agriculture in 2012.
The industry had no major significance until the 1940s. The home market was very small and geographically divided. Most of the manufacturing industry processed agricultural raw materials and was a very diversified and small-scale food and textile manufacture. The first engineering industry manufactured goods to use in agriculture and mining. The first steel mill was built during the First World War and during the 1920s a small car production started. World War II radically changed that structure. Trade across the seas was interrupted and Australia had to build an independent business world. A diverse domestic industry was emerging and industrialization was accelerated when an invasion appeared to threaten Japan and Australia needed military equipment. Development of steel mills and the engineering industry was the highest priority.
When international trade started again after the war, a change began in Australia’s trade patterns and of the country’s role in global business. Already in the 1930s, trade with the United States had increased, and contacts with the United States became increasingly important. When Britain entered Western European trade cooperation (the future EU) in the early 1970s, Australia lost much of the favorable treatment it had had in dealing with the old mother country. The US took over the role of Australia’s most important trading partner among the industrialized countries. As the wars ended in East and Southeast Asia and first Japan, later South Korea and eventually also Vietnam began its industrial reconstruction, their demand for minerals as well as machinery and other capital goods for industry increased. This widened the market for Australia, and that trend has continued since then, not least since China’s economic growth has accelerated. Most of Australia’s foreign trade now takes place with countries around the Pacific.
For a long time, Australia had protected agriculture and industry with very high import duties and low import quotas. In the 1980s, the Hawke government embarked on a reform program in Australia. The barriers to trade were reduced gradually and to varying degrees for different industries. The intention was for the industry to develop and become more efficient through external competition. The companies would run an advanced production that was based on research and could compete globally in terms of high value added products.
As a result, from the early 1990s, the industry was heavily restructured. Simpler products could be manufactured at much lower costs in low-wage countries in Southeast Asia and in China. Many multinational companies therefore moved their manufacturing from Australia and imports of semi-finished products increased instead. The number of companies and employees decreased sharply and many product groups are hardly manufactured anymore in Australia. During the 1990s, the value added of the manufacturing industry grew by only a few percent per year. Its share of GDP fell from 30 percent in 1970 to 9 percent in 2009.
The development in the mining industry was quite different. Constantly growing demand for mainly iron ore and coal meant that exports of minerals and energy raw materials grew at a rapid rate and that commodity group accounted for just over 35 percent of the total goods export value in the mid-00s. Since then, the changes have continued and you have seen an unprecedented “mining boom”. More than 55 percent of the country’s total export value came from the mining industry in the financial year 2010/11. In particular, iron ore exports to China have become the engine of the country’s economic growth and stability. At the same time, this means that Australia has become increasingly dependent on stable economic growth in China.
At the same time, both the manufacturing industry and agriculture have shown uneven and, for some years, worryingly low growth. For agriculture, this is mainly explained by the fact that the country suffered from several years of severe drought. For the industry, structural changes continue. In several industrial sectors, e.g. automotive industry, decreased production in 2010-12. The Australian dollar is highly valued, which has resulted in the country’s goods becoming expensive on the world market. Thus, Australia has also become an expensive country for visiting foreigners.
Agriculture and livestock management
In 2017, agriculture accounted for 4 percent of GDP and a slightly larger share of employment. However, it has a greater significance than that for the country. Australia is largely self-sufficient in food and exports 60 percent of agricultural production during normal weather conditions.
At the beginning of the 20th century, most of Australia’s exports consisted of agricultural products, especially wool and wheat. Gradually, more and more meat and dairy products were also sold to the UK and other countries in Western Europe. In 1970, agricultural products still accounted for almost half the export value. Agricultural exports continued to increase and came to include more and more commodities, such as fruit and, from the late 1980s, also wine. However, mineral exports have increased much more and in 2011 agricultural products accounted for only 11 percent of the country’s total exports. Just over half of these were vegetables, the rest were animal products. China has become the most important customer, followed by Japan and Indonesia.
Agricultural orientation varies across the continent as a result of climate and access to water. Nearest to the coast to the east and south-east are most hilly areas, largely forested. About ten miles offshore, a zone of the country’s most intensive agriculture is spreading, from the subtropical areas of Queensland to the temperate climate region of Victoria and southern South Australia, where cultivation conditions are similar to those in Western Europe. An area of high-yield agriculture is also located in the country’s southwest. In total, these areas make up only 4 percent of Australia’s entire acreage, but a large part of agricultural production comes from this. It is common for the farms to have a broad orientation with both livestock breeding and grain cultivation, but there are also special crops of fruit and vegetables. Sugar cane is also grown in Queensland and in South Australia and Victoria the cultivation of grapes has become increasingly important. Australia was the world’s sixth largest wine exporter in 2011 (see alsoAustralian wines).
The livestock management in Victoria is focused on milk production and from there a large part of the dairy products are exported. In areas with succulent pastures in the inner parts of Queensland and New South Wales, agriculture is focused on breeding cattle. Beef and veal are the most important commodity group in agricultural exports. The largest wheat districts are found in southwestern Western Australia, in southeastern South Australia and in southwestern Victoria. Internationally, Australia is not a major wheat producer, but the small domestic market means that most of the wheat crop is exported. During years of good returns, the country is one of the second largest wheat exporters in the world.
In areas with good natural pasture, breeding of sheep is a rewarding activity. Ullexport was once the important foundation of the country’s economy, but it has become increasingly important for many decades. The demand for wool has fallen sharply as synthetic materials have been produced. Australia is still, now with China, the world’s largest wool producer and most of it is good quality wool from merino sheep. Sheep breeding is found mainly in the inner parts of New South Wales and Victoria. Australia is by far the largest exporter of wool and meets 30 percent of world market demand. The largest customer is China.
Pastures of varying quality occupy a total of 56% of Australia’s land. Large parts of it are dry areas in the central part of the country. It is the driest in the desert of inner, central Western Australia. Infertile desert occupies just over 16 percent of Australia’s land.
The farms in Australia are almost exclusively family farms and the country is known for occupying exceptionally large areas. However, just over half of the farms comprise less than 200 ha, but since just over a tenth has more than 25,000 ha, the average area is as large as 3,340 ha. The largest farm (2011) is located in inner South Australia and covers close to 500,000 ha. The number of agricultural households decreases every year. This has been particularly evident in difficult dry periods, when the wheat harvest has been halved and the yield from rice and cotton crops has shrunk even more. Livestock breeding is not affected in the same way by extreme weather. Repeated periods of drought and even floods are natural features of Australia’s climate, and such extreme weather events have become more common in recent decades. During the period 2002-10, mainly southeastern Australia was hit by repeated years of severe drought, which meant that agricultural production hardly increased during that period. The following year, record rainfall came with severe flooding, but in 2012 the harvest was still the largest so far.
Forests have never played a major role in Australia’s economy; In 2010, the forestry and forestry industries accounted for only 0.6 percent of the country’s total employment, halving since 2000.
Abbreviated as AUS by abbreviationfinder.org, Australia’s forest policy is about the balance between preserving unique vegetation and meeting the demand for wood in different parts of society, thereby limiting the need for imports. About 70 percent of the continent is too dry for higher vegetation to grow there. Forests require more than 500 mm of annual rainfall, and commercially oriented forestry with new planting and replanting is mainly found in areas with more than 700 mm. In 2012, Australia’s forest areas were estimated to include 148 million ha of “natural forest” and 2 million ha of planted forest, so-called forest plantations. The largest forest areas are found in northern Queensland and on the slope of the Great Dividing Range along the southeast coast, especially in Victoria, and in western Tasmania. More than a quarter of the forest is privately owned and just over 7 percent is state-owned.
In 2012, a law was passed that criminalizes trafficking of illegally harvested timber, including from reserves. Increased insights on climate change and the role of forests as a carbon dioxide trap have led to reforestation of land that was previously harvested and also to integrate forestry into agriculture (farm forestry). The trees provide protection for the cultivated crops and reduce dehydration in the local environment. Forests are needed to secure the water supply in Australia, which is the driest of the continents.
Forest fires (bushfires) are natural features of the landscape, but in recent years uncontrolled forest fires have caused increasing damage to the built environment. The extreme heat of the new year 2002/03 caused forest fires in most states and destroyed nearly 2 percent of the country’s entire forest area. In 2009, the state of Victoria was hit by the worst known forest fire and in connection with the highest temperature ever measured in New South Wales in February 2013, it was ravaged by major forest fires.
As more of the natural forests are set aside as a reserve, the supply of wood decreases. In recent years, this has led to forest planting in forest plantations with monoculture. There, the yield per hectare is many times greater than in the natural forests as a result of plant breeding, modern farming methods, biological pest control and efforts to improve the tree’s resistance to diseases. It is a sustainable forestry that provides competitive timber production, and it plays an increasingly important role as the trees become harvestable in larger areas. About 2/3 of the plantations have private owners, mainly investment companies and forest companies. They make up only 1.5 per cent of the country’s forest area, but from that more than half of the timber is harvested annually in Australia. The planted forests consist of more than half of foreign conifers, mainly pine trees (Pinus radiata), whose wood is used in sawmills and wood fiber factories. The remainder has been planted with fast-growing native deciduous trees, predominantly eucalyptus, used as pulpwood in the paper industry.
The extensive forest reserves and the large forest fires cause growing problems for the forest companies. They want greater access to natural forests, at least until the forest trees’ young trees become mature. The forest industry mainly comprises sawmills that produce timber for the building and furniture industry as well as the paper industry that produces packaging materials and other lower quality paper products where recycled paper is a major part of the raw material. The production of plywood and wood fiber products has stagnated at a low level. Higher quality stationery, such as writing and fine paper, is imported. Imports of forest products are roughly twice the value of exports and come primarily from New Zealand.
The country’s economic zone stretches 200 nautical miles (370 km) off the coasts, making Australia the third largest own fishing zone in the world. However, nutritious ocean currents are lacking and therefore the waters are not very fishy. In terms of volume of landed fish, Australia is not among the fifty leading countries in the world. The largest catch volume results in sardine fishing, but the highest catch value comes from more valuable fish such as salmon and tuna outside of South Australia and around Tasmania and from seafood such as lobster and giant shrimp off the coasts of Western Australia and Queensland as well as oysters. in Tasmania. A large part of this catch is exported to countries in Asia, especially to Japan. Instead, cheaper fish are imported in canned and frozen form.
Aquaculture (aquaculture) in 2010 accounted for 40 percent of the entire fish industry’s production value. Both fish and seafood are grown, including oysters that produce white or silver-gray pearls. Overall, however, fishing and fish farming is an industry that has very little significance in Australia. Together with neighboring countries in the north, Australia seeks to combat illegal fishing between the continent and the large Southeast Asian islands.
Australia is one of the world’s most mineral rich countries. Around 2010, it was also the country where the mining industry expanded most. Mineral and energy raw materials accounted for just over half of export revenue. Mining industry is present in all the states but has thirst for Western Australia, where it accounts for almost one third of the state’s GDP. It is also important in the Northern Territory and Queensland. Two of the world’s three largest mining companies (2012) are fully or partially Australian, BHP Billiton and Rio Tinto.
In 2011, Australia was the world’s second largest iron ore producer in Chinawith a quarter of world production. The quarry had then increased sharply during the past decade, especially since 2008, in parallel with an exceptionally rapid increase in iron ore exports. More than 90 percent of the ore was exported in 2011, and almost 40 percent of all iron ore in the world market came from Australia. Almost all iron ore mining takes place in the Pilbar region of western Western Australia, which has the world’s second largest iron ore body. BHP Billiton and Rio Tinto each own several iron ore mines in this area as well as freight railways to the coast and several terminals for ore shipping. The ore is enriched before it is exported or transported by boat to the steel mills in southeastern Australia. By far, the largest customer is China, whose iron ore imports from Australia doubled in 2000-11.
Manganese is used in steelmaking, and Australia is the world’s second largest producer thereof. Manganese ore is mined in mainly central Northern Territory. The alloy metal nickel is mined in the southern part of Western Australia and the country is the third largest nickel producer in the world.
In 2011, Australia was the world’s largest producer of aluminum raw material bauxite and of semi-manufactured alumina. The country then accounted for about a third of world production. The extraction takes place in the northernmost parts of Queensland and the Northern Territory and also near Perth in southwestern Western Australia. Most of the production is exported.
Australia has the world’s largest reserves of lead and zinc that occur together and usually also with silver, and the country is one of the three largest producers in the world of lead and zinc. The extraction takes place mainly in the Mount Isa area in northwestern Queensland and in the Broken Hills in western New South Wales but also in Tasmania. Copper is mined in almost all states and Australia accounts for 6 percent of world production. The most extensive is the mining in Mount Isa in Queensland and in the Olympic Dam in South Australia.
Australia has the world’s second largest gold assets in South Africa and also the second largest production. Gold is extracted on a limited scale in almost all the states and especially in Kalgoorlie and Telfer in Western Australia.
In Argyle on the inhospitable Kimberley Plateau in northernmost Western Australia, diamonds of different quality are mined, mainly industrial diamonds, but also jewelry diamonds in different shades of color, such as the extremely rare pink. Here, in the 00s, there was the world’s largest single diamond mine, but that mining is now completed and the mining continues from 2013 in an underground part. Diamonds are also extracted in inner South Australia and Queensland. Almost all the mining of opal in the world takes place in Australia.
In the vast majority of cases, the large mineral deposits are found in sparsely populated or almost completely unpopulated areas, far from major settlements, community service and transport routes. When mining begins, new communities must be built up, and large transport investments are also needed.
Mining is very highly mechanized and often takes place in open-pit mines on a gigantic scale, and it entails chemical environmental impact and a completely changed landscape. In many cases, there are large deposits in areas that traditionally belonged to Aboriginal people. Over the years, this has caused many conflicts in Western, Northern and Central Australia. In recent years, the right of indigenous peoples to such land has been strengthened through legislation, and their position has improved in negotiations with the mining companies. During the years around 2010, they were insured in many cases a proportion of the jobs when new mines were opened.
The rapidly growing demand of the last decade has meant increasing profits for the mining companies. Local communities and states have demanded that more of the companies’ profits from the resource exploitation be shared, and in 2012 a law was passed on a thirty percent taxation of profits above a certain level from the extraction of coal and iron ore.
In 2012, however, the demand for coal and iron ore, mainly from China, was dampened. Australia’s mining industry is large-scale and very highly mechanized, but it has high costs and can be difficult to compete when new, large and well-located mines are opened in low-wage countries in other parts of the world.
Australia has large assets on most energy raw materials, especially coal, uranium and natural gas, and domestic fossil raw materials account for almost all of the country’s primary energy production. In 2010, 37 percent of these came from coal, 35 percent from oil, 23 percent from natural gas and 5 percent from renewable energy. In addition, two-thirds of the energy raw materials extracted are exported. Coal and natural gas production is increasing every year, mainly as a result of sharply increased demand in East Asia, primarily in China.
In Australia, there are a tenth of the world’s now known coal assets. Australian coal has a low content of sulfur and ash and is therefore in great demand in the steel industry in Asia (Japan, China, South Korea, India) and in the EU countries. Nearly two thirds of such coal on the world market comes from Australia. Coals of slightly lower quality and, above all, coal are mainly used to generate electricity in the country’s thermal power plants but are also exported to countries in East Asia. The extremely rapid economic growth in China has resulted in a multiplied demand for high quality imported coal. For Australia, this has more than offset the reduced demand for coal that followed the recession in developed countries during the latter part of the 1990s. Coal exports have therefore increased every year. Several new mines have been opened and the capacity of the railway network and the export ports has been improved. Coal is the second most important export of iron ore and in 2012 accounted for 18 percent of all export revenue in the commodity trade. Among the world’s coal producers, Australia came in fourth place in 2011. The country then accounted for just over 6 percent of all coal production in the world. 95 percent of coal mining takes place in Queensland and New South Wales and most of it in open pit mining. Almost all mining of lignite takes place in Victoria.
Australia has one third of the world’s known uranium resources, significantly more than any other country. In 2011, the country ranked third as a producer, after Kazakhstan and Canada, and had 11 percent of world production. Australia exports all uranium mined, as it cannot be used in the country. More than half of the production comes from the Olympic Dam in South Australia, where uranium is extracted as a by-product of copper mining in an underground mine. Significant is also the uranium mining in a mine in Ranger, on Aboriginal reserved land near the coast of the Northern Territory. The states in the southeast do not allow uranium mining, and Victoria also prohibits exploration for uranium. Decreased state finances and increased global uranium demand have led to increased uranium mining becoming a controversial issue in Australia. More than a quarter of uranium exports go to each of the US and the EU.
Natural gas is the third most important energy raw material in Australia, in terms of both known assets and uses. In 2010, 65 percent of the production came from the Carnavon field off the west coast of Western Australia. The gas is cooled to -162 degrees and then exported in liquid form (so-called LNG) to mainly Japan, China and South Korea. Growing demand has also led to the exploitation of two natural gas pools north of Carnavon. Natural gas from the Gippsland field outside Victoria is used within the country for generating electricity. Smaller occurrences in the Northern Territory are mainly used in this area. In 2012, natural gas accounted for almost 5 percent of the country’s export revenue.
Globally, Australia has only small assets on oil, but crude oil is of high quality and 70 percent of the extraction is exported. More than 2/3 come from the Carnavon field and are exported to refineries in Southeast Asia, mainly in Singapore. Economically, this is cheaper than transporting the crude oil to the seven domestic refineries in the states of the Southeast. Instead, oil from the Gippsland field is used, but also to an increasing extent oil imported from Malaysia, Indonesia and Vietnam. This means that Australia is now a net importer of crude oil.
Only 5 percent of primary energy comes from renewable energy sources, although the country has high potential in this regard, especially with regard to wind and solar power. Hydropower has been expanded in New South Wales and Tasmania, wind power in South Australia and Western Australia, and solar power has begun to be extracted in the inner parts of the continent. Waste from the forest industry is used in New South Wales and residues from sugar cane plantations in Queensland. There are also good conditions for using wave power. Despite this, the use of renewable energy in the early 2010s, with the exception of wind power, hardly increased. About 1 percent of the fuels were made up of biofuels in 2010.
Electricity generation and distribution was initially built up within each of the states separately and the networks were not joined together. Each state used the raw materials that were right there. There is still a division into three different markets with separate networks: in the east, north and west. In 2010, coal accounted for 52 percent of the raw materials for electricity, lignite for 23 percent and natural gas for 15 percent. The share of oil was insignificant. Hydropower then provided only 4.5 percent of all electric power, while wind power accounted for 2 percent and biomass for 1 percent.
Industry and service
Australia is included among the highly developed industrial countries and manufacturing industry along with the mining and construction industries, in 2017 accounted for 25 percent of the country’s GDP. These three parts are now about the same size and the tendency is for the mining industry to grow in importance while the manufacturing industry is shrinking.
Australia was industrialized relatively late and it was not until the 1940s and 50s that a broad industrial sector emerged. The companies were usually small and focused on producing for the small domestic market. Industrial employment was most extensive during the 1960s, and in 1970 there were 25 percent of those employed in the manufacturing industry. Subsequently, as in other industrialized countries, it has gradually decreased. Nationwide transport networks were missing and industries were concentrated to the state capitals. In its main features, this pattern remains, but new corporate forms and changed industry composition have meant that the manufacturing industry is now even more concentrated in the metropolitan areas of Melbourne and Sydney.
The 1970s industrial companies were in a protected economic environment with government subsidies and high import duties, and they had hardly any connection to international business. The factories had a poorly educated workforce, and most business executives did not find it relevant to product development.
Economic liberalization during the 1980s and beyond meant a completely changed situation for Australia’s industrial companies. Gradually the import barriers were reduced, and with a freer world market, traditional Australian companies found it difficult to assert themselves.
The structural changes have continued and the manufacturing industry accounts for a strikingly low proportion of employment. The reductions have been particularly evident since the turn of the century, for example in the textile, metal goods and automotive industries. But many companies that managed the transition and many newly established now produce for an international market. The importance of the manufacturing industry to the country therefore increased until the latter part of the 1990s, and in 2005 it accounted for half the export value. Subsequently, the country’s role changed significantly in the international business sector (see Business and Economics). In the 2010/11 financial year, industrial goods accounted for less than 35 percent of the export value. Productivity in the manufacturing industry has increased more slowly in recent decades than in most comparable countries.
The food industry is the industry sector that provides the largest contribution to GDP and has the most employees. It is spread across the country and encompasses a number of small companies but also a number of very large ones that mainly produce for export. The industry is responsible for a large part of the export of industrial products, with mainly frozen beef, wine, dairy products and semi-finished cereals.
engineering industryhas almost as much significance as the food industry. This includes, above all, the manufacture of machinery and equipment for the agricultural and mining industries, but also the automotive industry. Demand for cars increased very sharply after the end of the war and a number of foreign car companies then built assembly plants in Australia. In the early 1970s, car manufacturing produced nearly half a million cars a year, but after that it shrunk and in 2010 less than half the number was produced. Most foreign car companies have ceased production in Australia, including as a result of several of their domestic subcontractors failing to cope with increased competition from outside the last decade. The three major companies GM Holden, Ford Australia and Toyota Australia account for most of the domestic car production. They mainly have larger car models that are adapted to Australian conditions. Other vehicle types are imported, and cars are now one of the most expensive items in imports.
The production of base metals, metal products and chemicals is a good condition in Australia, as the country has large resources on minerals and energy raw materials. The manufacture of base metal products such as copper and aluminum sheet is the industry industry that has increased most in value over the last decade. However, production has hardly increased in terms of finished metal products. Competition from newer industrialized countries with much lower production costs has become devastating for many companies in several industries that have previously been prominent in Australia’s business sector. The steel industry is a clear example of this. Mining company BHP Billitonbuilt a steel plant in Newcastle north of Sydney already during the First World War and the steel industry grew as the domestic engineering industry expanded and demanded more steel. The steel mills became a very important part of the country’s industry during the 1960s and 1970s and Australia also exported steel. Up until the beginning of the 1990s, the steel industry was strong, but after that the crises relieved each other. Particularly strong were the reductions in 2011–12 within the two large steel companies BlueScope Steel in Port Kembla in New South Wales and OneSteel in Whyalla in South Australia. A highly valued Australian currency had resulted in the country’s steel becoming expensive on the world market. China had expanded the steel industry at an exceptionally fast pace and could compete with a steel price that was one third of Australia’s. China took over Australia’s export market and even more of the Australian domestic market. In 2011, Australia accounted for only 0.4 percent of the world’s steel production and thereafter the proportion fell further.
As in other high-income countries, the service sector responds for the largest share of GDP and employment by far, 69 percent and 77 percent for the 2011/12 financial year, respectively. it fluctuated. International terrorism and the fear of epidemics in East and Southeast Asia reduced the number of tourists and business travelers, which led to reduced demand in the hotel and restaurant industry. The industry’s structural changes and closures reduced the need for business services and also affected households’ consumption of goods and services in affected industrial areas. Despite this, growth in the service industry was, on average, fairly good until 2009. The industry that grew the most was education.
The globalization of some service industries has become increasingly evident since 2009. Using the Internet, booking, bookkeeping, editing, reviewing and consulting and analysis work can be outsourced in the countries where it is least expensive. As a result, many such services have disappeared from offices, hospitals, banks and the like in the high-wage country of Australia, and employment in the IT sector has not increased as expected. Growth has been fastest in education and services for tourists, but growth is now also uncertain.
Over the past fifteen years, Australia’s foreign trade has changed mainly in two respects. China’s importance has increased very significantly and mineral exports have become increasingly important. China was Australia’s sixth largest trading partner in 2000 and since then trade between the two countries has multiplied. China passed the US and Japan in 2009, formerly the two main customers and since then, China’s importance in Australia’s foreign trade has increased further. The composition of commodity exports changed significantly during the period 2006–11. Export revenues from minerals, energy raw materials and oil products increased from 48 to 65 percent, while for industrial products they decreased from 39 to 24.5 percent. The agricultural contribution decreased from 13 to 10.5 per cent.
- COUNTRYAAH: Find major trading partners of Australia, including major exports and major imports with latest trade value and market share as well as growth rate.
The most important export goods are iron ore (close to 24 percent of export income), coal (just over 18 percent), gold, natural gas, bauxite and aluminum. Next in importance follows copper, wheat, beef and pharmaceuticals. Australia has become a prominent commodity exporting country, as it has been seventy-five years before.
Goods imports have not changed as much. Minerals, energy raw materials and oil products account for 18 percent of import costs, agricultural goods for just over 4 percent and industrial goods for almost 78 percent. The most important import goods are crude oil (almost 9 percent of import costs), passenger cars (nearly 7 percent), refined oil, telecommunications equipment and pharmaceuticals. Next in importance is followed by trucks, computers, gold and advanced workshop equipment.
The main exporting countries are China, Japan, South Korea, India, USA and the United Kingdom. The main importing countries are China, the United States, Japan, Singapore, Germany and the United Kingdom.
Foreign trade comprises 82 percent trade in goods and 18 percent trade in services. The revenues from the service trade mainly include payments from foreign visitors, partly students (see Education), partly businessmen and tourists. The expenditure items in the service trade mainly comprise costs for foreign travel and freight transport and for the purchase of business services. Trade in services has shown a deficit in recent years, while commodity trade surplus in 2010-12, mainly as a result of sharply rising mineral prices on the world market. Australia then had a positive trade balance. Australia is now an advocate for a liberal world trade and has low tariffs itself.
In recent years, tourism has become increasingly important to Australia’s economy. In 2010, the country was visited by about 6 million tourists, primarily from Japan, Western Europe and the United States but increasingly from China.
The tourist streams go primarily to the big cities, mainly Sydney but also Melbourne, Canberra and others. South of Brisbane lies the Gold Coast area with, among other things, Surfers Paradise. Here are miles of long beaches and huge tourist complexes with hotel, recreation and entertainment facilities have been built up, among other things. through large Japanese investments.
Note: the capital city of Australia is Canberra with a population of 365,000 (estimate 2011). Other major cities include Sydney with a population of 4.6 million, Melbourne with a population of 4.1 million, Brisbane with a population of 2.1 million, Perth with a population of 1.7 million, Adelaide with a population of 1.2 million (2011 estimate).
Further north along the Pacific coast, the Great Barrier Reef, with its opportunities for swimming, sport diving, etc., is a popular tourist destination. Australia’s foremost attraction is certainly the country’s peculiar nature and its unique fauna and flora. Add to this the Australian culture and sacred places. In many cases, these attractions are united within the national parks, e.g. in Uluru (450 km southwest of Alice Springs in the middle of the continent). Here you will find the more than 300 m high cliff Uluru (Ayers Rock), which is the most sacred place of the Aborigines. To the east of Darwin in the northernmost part of the country is the Kakadu National Park, which, like the Uluru and the Great Barrier Reef have been granted World Heritage status by UNESCO.