Australia's Exports Are Changing
If you want to see how much our economy has changed over the past two decades, have a look at our exports says Ross Gittins from the SMH.
There've been big changes in what we export and who we sell it to. Most people are conscious that, since we began opening up our economy to the world in the mid-1980s, we've been importing a lot more stuff. Walk into a supermarket or just the car park--and you see it staring at you.
But while we can see how much we export--it's sitting in other countries' supermarkets and car parks. In fact, however, we're exporting a lot more than we did.
Exports of goods and services now account for about 18 percent of gross domestic product(ion), up from 16 percent in the mid-'80s. They actually got up to 23 percent in 2000, but they've fallen back during the years of our great housing boom. With any luck they'll soon start growing strongly again.
Another thing that's not visible to the naked eye is the changed "composition" of what we export. It will surprise many people that our exports of manufactures have expanded considerably since we began dismantling protection against imports, so that they now account for almost a quarter of our total exports of goods and services.
What's more, about 70 percent of our manufactured exports are "elaborately transformed" as opposed to "simply transformed". That is, they're more sophisticated items, with more value added.
Exports of services--mainly education, business and professional Services and inbound tourism--have also grown strongly over the past 20 years or so, so that they now account for almost a quarter of total exports.
But rural exports haven't grown all that strongly, and their share of total exports has dropped markedly, from almost a third to just over a fifth. Successive droughts haven't helped and nor have weak world prices for agricultural goods.
Minerals and fuels are still mainstay of our export performance but, even so, their share of total exports has slipped to a third.
So whereas people--here and abroad--have always seen us as a country whose exports are dominated by rural and mineral commodities, that's less true than it used to be. Since the mid-'80s, their share of total exports has fallen from two-thirds to just over half.
But as the composition of our exports has changed, so has their "direction"--the countries we send to.
No prize for knowing that, over the past two decades, we've been exporting a lot more to north-east and south-east Asia. It now takes almost half our exports of goods and services.
But as well as Asia's share expanding, there've been big changes in which Asian countries are taking our stuff. For instance, while Japan remains our biggest single export destination, its share has fallen continuously since 1985-86, dropping from 25 to 16 percent.
And while Japan's share has been falling, China has been rising to take its place. …