What are the prospects for the Australian economy?

Australia has a prosperous market economy which is dominated by its service sector (over 70 per cent of GDP); however, its the agricultural and mining sectors which account for the bulk of exports (some 65 per cent), although together they contribute less than 10 per cent of GDP. The country is a major exporter of bauxite, coal, copper, diamonds, food products, (natural) gas, gold, grain, iron, lead, meat, mineral sands, opals, silver, tin, tungsten, uranium, wool and zinc. The manufacturing sector has experienced instability in recent times but recovered in 2007, when it contributed almost 10 per cent of GDP.

   In the last few decades, Australia has gone from boom to bust and back again, the prosperous ’80s being followed by the worst recession since the Great Depression of the ’30s – a recession which hit Australia earlier than most other developed countries. In the last 17 years (1992-2008) Australia enjoyed uninterrupted growth averaging 3.3 per cent a year, aided by growing demand for commodities and robust government policies. However, with the onset of the worldwide recession in 2008, business confidence was at an all-time low and the country was on the brink of recession in March 2009 (manufacturing activity fell to a 16-year low in February 2009). However, Australia was one of the few Western countries that never actually went into recession, with growth of around 0.5 per cent in 2009 and a robust forecast for 2010 of around 3-4 per cent.

   The Australian economy and exporters (who export some 40 per cent of their goods to the Asia-Pacific region) have been affected most by the tightening of trade finance and the slowdown in emerging markets. The demand from the Asian region is significant to the prosperity and growth of Australia's economy, although demand was still fairly robust despite the slowdown in world markets.

For more information see Living and Working in Australia by David Hampshire