In June 2021, Australia faced a serious outbreak of the Delta variant of COVID-19. The lockdown that ensued across several states and territories resulted in an acute fall in import and export activities in Australia. This was largely attributed to the manifestation of supply-side issues such as increasing port backlogs and border closures.
According to the DHL Export Barometer 2021 report, 48% of Australian export businesses recorded a drop in revenue due to the coronavirus, out of which almost one in four was marked by significant declines. The services sector suffered the biggest hit largely due to lockdown and travel restrictions.
Yet, key findings of the report indicate a strong recovery in the new year, with 69% of businesses within the Australian export industry expecting revenue to grow, up from the 19-year average of 63%. This significant upsurge could be due to the agility and proactiveness of Australian exporters in responding to market demands. Supported by interconnected global supply chains and digital technology, many of these businesses have managed to ride out the pandemic storm and remain competitive.
Given a steady growth expected of global trading, the Barometer also found several export markets which are highly desirable. If you are an exporter, here are some destinations to consider in 2022:
Australia has traditionally maintained strong trade links with New Zealand, with each country being the major source of tourist activities. As a key trade sector in many countries and an invisible form of export, tourism is often overlooked when considering export markets. In 2022, international tourism is expected to become even busier than pre-pandemic times – with a growth of nearly 228% in spending. Tourism can also be vital for Australia’s economic success and recovery from COVID-19. It boosts the country’s revenue, creates jobs and enhances the cultural exchange between visitors and citizens.
Additionally, New Zealand has always been a favourite destination to trade goods, with 58% of Australian exporters active in the area. With the Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), trade between the two countries has been efficient with businesses utilising the Rules of Origin criteria to trade goods free of duty and quantitative import restrictions. Since 1992, DHL Express has been operating an overnight service that bounces between Sydney and Auckland; and in 2020, a new Melbourne-Auckland service was also launched.
The Association of Southeast Asian Nations (ASEAN) region is a conglomeration of emerging markets and opportunities. With expanding nations driving strong economic growth, the global appetite for Australian-quality goods and services remains high.
This is further boosted by the inception of several comprehensive Free Trade Agreement (FTA) policies signed between Australia and other high-performing ASEAN countries. The benefits of these transnational agreements coupled with strong demand creates many opportunities which can be leveraged by businesses operating in Australia. However, when it comes to industry trends, Japan is an export market to watch as interest from Australian traders are predicted to triple this year.
It is interesting to note that the number of export orders in North America jumped 14% to 30% during the past 12 months. However, the proportion of businesses reporting a decrease stayed the same at 41%.
While the cost of freight and supply chain issues in North America remain the biggest areas of concern for Australian exporters, the situation looks to improve as countries around the world ease into a post-pandemic disposition.
The Barometer report has identified four markets of interest for exporters to consider: New Zealand, North America, Europe and the United Kingdom. As a robust and digitalised nation with strong trade links with different countries, this bodes well for Australian businesses seeking opportunities in global import and export markets.
Despite the economic impact of COVID-19 on world trade, Australia has experienced remarkable growth during the pandemic, especially in the e-commerce sector. The global B2B and B2C e-commerce market is also expected to expand by USD1.4 trillion by 2025. For the rest of the world, similar trends are also emerging.
Simon Birmingham, the Minister for Finance (Australia) said in a foreword that “the Australian government continues to pursue an active and ambitious open trade and investment agenda” and has “secured duty-free or preferential access to an extra 1.7 billion consumers in other economies”.
With strong key indicators of a market bounce-back, the Australian export industry is set to recover – a positive outlook for both B2B and B2C sectors, especially for those looking to enter the e-commerce industry. This should provide assurance and create confidence in driving innovation and new marketing strategies in the new year. With the support of the global network of DHL Express, companies and organisations will be able to leverage dynamic logistic capabilities to reach out to emerging export markets on a global scale.