What is the future of Australian exports?
Export industries are set to grow dramatically over the next five years as free trade agreements with Asian nations come into effect.
Market research released by IBISWorld shows that Australian exports are set to rise between 10% and 35% by 2021. Much of this growth is likely to occur in China, Japan, and South Korea.
IBISWorld further estimates that the top 20 export industries will be worth a total $260 billion or 15.7% of GDP.
What does exports growth mean for SMBs?
Part of the IBISWorld research identified the twenty industries that are likely to have the highest rates of export growth. While not all of these industries are very large, the strong growth rate indicates increasing demand for a wide range of Australian goods in overseas markets.
It should come as no surprise that the industries set to grow the most are in the agriculture and resources sectors, but there are also many export industries in which SMBs can flourish.
Some notable industries that the report identified as in the top twenty for export growth include “cider production” at #6, “health snack food production” at #7, “toy and sporting goods manufacturing” at #14.
This indicates that there is significant demand for high-quality or premium Australian goods. This can likely be at least partially attributed to the emerging middle class in China and other Asian nations. With increased disposable income comes increased demand for premium or luxury goods.
This provides an excellent opportunity for Australian SMBs to find a niche market with strong international demand and produce a high-quality product that outperforms the mass produced or low-quality products that may be available locally.
Strong export growth in Australian industries is also supported by strong growth in the global flexible packaging industry over the next five years. According to a report by Markets and Markets, the global flexible packaging industry is set to grow from $US98 billion in 2016 to $US125 billion in 2021.
The report also identifies Australia and the Asia-pacific as the region that is set to experience the highest growth rate. The report attributes this growth in part to the increased demand for food and beverages in China and India.
The demand for high-quality end-user packaging can also be attributed to the growing middle class and disposable income in the region.
Again, this shows a strong opportunity for Australian businesses to capitalise on the demand for high-quality goods and packaging in export markets.
About the author
Hugh Steele writes for ITT Jetpak, a supplier of packaging consumables and machinery, suitable for many different industries and both domestic and export applications.