Why this is important to Wisconsin businesses: Both countries have weathered the pandemic well and limited the economic damage due to strict lockdowns.
As a result of strict domestic lockdowns and limitations on international visitors, Australia and New Zealand have had very low levels of COVID-19 cases compared to the U.S.
The International Monetary Fund predicted in October that in 2020, the economies of Australia and New Zealand would contract by 4.2% and 6.1%, respectively, and that they would rebound in 2021 by 3% and 4.4%, respectively. To combat the adverse economic effects of the pandemic, both countries have been investing heavily in creating economically significant opportunities across multiple sectors. They are beginning to see businesses return to normal operations, with restrictions on interstate travel easing in Australia and an Australia-New Zealand travel bubble in the early stages of trial.
Both countries authorized record stimulus packages in the first half of 2020, with Australia’s stimulus totaling $320 billion AUD ($228 billion USD) and New Zealand formally establishing a $50 billion NZD ($33 billion USD) COVID-19 Response and Recovery Fund. Looking ahead, the COVID-19 environment has continued to spur on a significant wave of government investment across new initiatives focused on bolstering both economies on the path to recovery. Examples of the most significant of these are outlined below.
- Approximately $1.5 billion AUD ($1.1 billion USD) has been committed over the next five years to Australia’s Modern Manufacturing Strategy, which will focus on six priority sectors to develop Australia’s local manufacturing capability. This program includes co-funding arrangements that will enable Australian firms to better invest in new technologies.
- Australia has committed to a $110 billion AUD ($78 billion USD) Infrastructure Investment Program over the next decade, which will drive demand for products and services used in building and upgrading infrastructure for roads, rail, airports, hospitals, energy and water.
- Significant investments have also been made to boost the robotics and space sectors.
- New Zealand also has an estimated $21.1 billion NZD ($14.1 billion USD) worth in short- and medium-term infrastructure projects currently in New Zealand’s project pipeline, and has introduced an Industry Transformation Plan for industries posing economically significant opportunities, such as agricultural technology, digital technologies and advanced manufacturing.
With both countries approaching the end of their “second waves” of COVID-19, we are seeing a gradual return to “business as usual,” and companies are looking for ways to recover profits that were lost or reduced during the height of the pandemic. This presents a great opportunity for Wisconsin exporters to begin to engage with companies in the Australia-New Zealand region that may be looking at their current supply chains and assessing the products, equipment, technology solutions and services that they may need to source to adapt and grow. The instability in the region’s Asia-based supply chains, coupled with the perception of the U.S. as a source of quality products, could present a unique opportunity in timing for U.S. companies to engage with potential partners and customers in the region.