Australian Exports: Global Demand and the High Exchange Rate
Australia; exports; resources; manufactures; services; exchange rate; emerging Asia
Growth in Australian exports was weaker than had been expected over the past 10 years across all major categories: resources, rural, manufactures and services. While exports of bulk commodities and liquefied natural gas (LNG) grew strongly in response to higher demand from Asia, this was partly offset by declines in exports of oil and processed metals. Non-resource exports have been adversely affected by the appreciation of the exchange rate and the ongoing rise in the share of global production occurring in emerging economies. Looking ahead, the surge in mining-related investment since the mid 2000s is expected to lead to stronger growth in resource exports over the next five years. As incomes grow further in emerging Asia, demand for Australia’s exports of food products, high-skilled manufactures and services is also expected to rise.