With the global economy still in a slump, businesses are or should be looking for new markets to increase their revenues. Businesses that are not already doing so should consider exports, and this post will discuss Australia. Australia for years was a moderately prosperous developed country, but otherwise uninspirational. In fact during the early 1990s there was a recession in Australia. Starting around the turn of this century, Australia began to experience a natural resource boom, exports of iron ore, bauxite and other minerals skyrocketed, helping the Australian recovery. Agriculture exports also boomed, making Australia one of the top exporters of grains, beef, and even wine. Australia went from relatively flat growth to annualized growth rates of 4% quarter after quarter, which is good for a developed nation. Thanks to shifting their exports market to China and economically friendly policies, Australia was able to avoid the worst of the Great Recession that hit Europe and North America hard.
Recently, growth has cooled down, but still strong compared to the rest of the developed world. Australia in 2013 had an annual GDP growth of 2.7%, compared to the US of 1.9% and Japan of 1.5% for the same year (that even those numbers are considered good for developed countries shows how bad the Great Recession hit the world). Furthermore, Australia ranks number three on the Heritage Foundation’s economic freedom index, with a total score of 82. This makes Australia a very business-friendly, an import-friendly country. Growth is still strong enough that Australia has a very immigration friendly policy for skill laborers and professionals, particularly those professions related to the mining sector. The relative ease and low regulatory burden will encourage entrepreneurial risk taking helping wean Australia off of being an export only driven economy.
The boom period of Australia may have cooled, but the immediate future of Australia still looks good. If your business is considering expanding to exports, consider looking to Australia. Currently Australia has both low tariff and non-tariff trade barriers. It is also relatively easy for a company to open operations or expand their business in Australia. In contrast to the lackluster growth of the rest of the developed world, Australia stands out a winner, and is expected to be so during the next few years.