Why this is important to Wisconsin businesses: The stable, strong economy continues to make Australia an attractive market for exporters.
Australia’s economy has returned to pre-pandemic levels, with broad-based growth and a stronger recovery than most other advanced economies, according to a report by the International Monetary Fund, released in February.
Inflation has risen significantly, but it is projected to inch down to a target between 2% and 3% by the end of 2024. Growth is expected to slow from 3.6% in 2022 to 1.6% in 2023, as higher interest rates and the weaker global economy reduce both exports and domestic demand.
Unemployment dropped to 3.4% in November 2022—a 50-year low—while labor force participation reached record highs. Tax revenues exceeded pre-pandemic levels, a Foley and Associates report says.
In January 2023, S&P Global affirmed Australia’s AAA credit rating and said it expects the nation to avoid a recession.
Australia’s economy will face some challenges in 2023, including the continuing impact of the pandemic on international trade and travel. Another issue is the ongoing impact of the global economic slowdown on Australia’s key trading partners, including the U.S. and China.
However, a recent survey of Australian business leaders by JPMorgan shows that confidence in the country’s economic outlook has improved, with a majority of respondents reporting positive expectations for growth in key sectors such as construction, manufacturing, and professional services.
Australia’s government is embarking on a series of infrastructure projects that will boost construction and create jobs. In fact, construction and manufacturing are expected to show some of the strongest growth, based on infrastructure development and improvements in the housing market, according to the JPMorgan survey.
The government also continues to invest in renewable energy projects and promote the transition to a low-carbon economy, which will provide opportunities for overseas companies in areas such as wind and solar power, as well as energy storage and grid management.
The health care sector is expected to perform well in 2023, too, as the country continues to invest in new technologies and treatments to improve health outcomes and reduce the costs of healthcare delivery. These investments may provide opportunities for overseas companies in medical devices, biotechnology, and telemedicine.
Wisconsin exporters are encouraged to consider Australia as part of their 2023 international business development plans.