Exporters look to US

06 Aug, 2015 07:38 AM
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rural exports were up 7 per cent to $43 billion

TWO-THIRDS of Australian exporters expect their orders to increase over the next year as the falling dollar and new trade agreements have boosted business confidence to the highest levels in five years.

But DHL's annual export barometer survey shows an expectation of strong growth in sales to the US, where the economy is recovering, even though the main new market openings are in north Asia following the trade agreements with Japan, China and South Korea.

While 56 per cent of exporters expect orders to China to grow over the next year, virtually the same proportion, or 55 per cent, expect orders to rise to North America.

The overall upward trend appears to be strengthening with 66 per cent of respondents to the survey saying their orders would increase over a year compared with only 47 per cent who say orders will increase over the next three months. Export confidence fell to the point where only 48 per cent of exporters expected sales to rise over the next year after the global financial crisis but the outlook is now tracking back towards the survey's 15-year high of 69 per cent.

The outlook figures come as the latest export figures from the Australian Bureau of Statistics released this week show the value of Australia's total exports in 2014-2015 was $319 billion, a decrease of 4 per cent.

But while the value of resource exports declined, there were robust increases in non-resource exports.

The value of services exports was up 9 per cent to $63 billion, rural exports were up 7 per cent to $43 billion and manufacturing exports up 4 per cent to $44 billion. Trade minister Andrew Robb argued that Australian exporters are making a transition from resources exports.

University of NSW economist Tim Harcourt said the confidence about business rising in a wide range of countries was the striking feature of the latest export survey.

"It's not just China, it shows the take-up in the US, Europe and many other places," he said.

The strength of the US market is underlined by the way 53 per cent of companies say they export to the US, which is up 7 per cent, while 39 per cent say they export to China which was up only 2 per cent.

New Zealand remains the most penetrated market with 57 per cent of respondents saying they export there, which was up 4 per cent.

Fifty-nine per cent of exporters say the 10-year-old US trade agreement has been good for their business, which is higher than for the other existing agreements, but sentiment about the Japanese agreement has picked up significantly from last year now that it is up and running. Thirty-five per cent of respondents thought it would be useful last year but now 41 per cent say it is.

The upbeat export outlook comes as the 12 nation Trans-Pacific Partnership (TPP) lost momentum at the weekend.

Exporter interest in the TPP has risen to 46 per cent compared with 37 per cent last year but 51 per cent of businesses thought the deal would be neutral for them.

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