Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 166

Australia’s other boom exports

Australia has some important and resilient industries which have taken up some of the slack in the wind down of the construction-led commodities boom. Record tourist numbers from China, education for international students, strong food exports and a resurgent wine export industry have been sectors which have not only been performing well but have been creating new records. Australia’s economy grew 3.1% year on year to the first quarter of 2016 on the back of a better than expected services sector.

Increasing arrivals to Australia, especially from Asia

Short-term arrivals from Asia into Australia make up the largest share of any source region. In 2015, as shown in Chart 1, 3.4 million visitors from Asia came to these shores. For the first five months of this year, 3.3 million people have arrived on short-term stays, almost one million more than for the same period five years ago.

Chart 1: Short-term arrivals into Australia in millions, 2015

Source: ABS, Owners Advisory, July 2016

Australia is one of the biggest beneficiaries of the rising consumer in Asia where the region is expected to account for more than two-thirds of the global middle class by 2031. The tourism numbers have boomed from China with 1.4 million short-term arrivals from the mainland and Hong Kong in the past 12 months. This number has now surpassed New Zealand as the country where most short-term arrivals originate.

In addition to tourism, Chinese and Indian students are taking education opportunities in Australia. Education sits behind iron ore and coal as the country’s third largest export. In 2014–15 export income from education was estimated at $18.1 billion. Education is also a pathway to settlement for students who opt to remain in the country as skilled participants.

Food glorious food

Demand for a bit of ‘Australia’ in the form of food and wine has seen both export classes touch record highs in the past three years. Grain and meat sales have garnered a lot of the attention as Asian consumers change to a more protein-based diet. Agricultural and fisheries exports for the last financial year reached about $46 billion, as shown in Chart 2, or about 25% of Australia’s overall commodity exports of $205 billion.

Chart 2: Australia exported over $45 billion of rural products in 2015

Source: ABS, Owners Advisory, July 2016

Australian wine rises on strong Chinese demand

The Australian Bureau of Agricultural Sciences reports that annual wine exports grew over 10% in 2015, and is forecast to generate sales of $2.2 billion in the coming year.

Chart 3: Australian wine to China 

Source: Department of Foreign Affairs and Trade, Owners Advisory, July 2016

Austrade points to the Chinese middle class as the primary driver of interest in Australian wine, which is regarded as a stable, consistent and high-quality product. China is now the second largest export destination for Australian sparkling, red and white wines, taking over from the United Kingdom earlier this year.

Achieving exposure to these export sectors

There are many ways for investors to gain exposure to these sectors. Without going into much detail here, Sydney Airport is one of the main gateways into Australia, and while shares are not cheap, the medium- to long-term returns should persist into the future.

Navitas is a global education provider offering a range of educational services including university programmes, resettlement assistance and language training. Navitas scores well on a number of key metrics of profitability, quality of earning and a management team delivering on its mandate.

Treasury Wines is one of the world’s largest wine companies with brands including Penfolds, Wolfblass and Rosemount, and the outlook for growth of underlying sales and earnings looks strong.

 

John O’Connell is Chief Investment Officer of Macquarie's Wealth Management group, and Founder of the bank’s roboadvice division, OwnersAdvisory. This article is general information and does not consider the investment needs of any individual.

 


 

Leave a Comment:

RELATED ARTICLES

Red wine and our green reputation in China

What export boom?

banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Getting rich vs staying rich

Strategies to get rich versus stay rich are markedly different. Here is a look at the five main ways to get rich, including through work, business, investing and luck, as well as those that preserve wealth.

Latest Updates

SMSF strategies

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Superannuation

The huge cost of super tax concessions

The current net annual cost of superannuation tax subsidies is around $40 billion, growing to more than $110 billion by 2060. These subsidies have always been bad policy, representing a waste of taxpayers' money.

Planning

How to avoid inheritance fights

Inspired by the papal conclave, this explores how families can avoid post-death drama through honest conversations, better planning, and trial runs - so there are no surprises when it really matters.

Superannuation

Super contribution splitting

Super contribution splitting allows couples to divide before-tax contributions to super between spouses, maximizing savings. It’s not for everyone, but in the right circumstances, it can be a smart strategy worth exploring.

Economy

Trump vs Powell: Who will blink first?

The US economy faces an unprecedented clash in leadership styles, but the President and Fed Chair could both take a lesson from the other. Not least because the fiscal and monetary authorities need to work together.

Gold

Credit cuts, rising risks, and the case for gold

Shares trade at steep valuations despite higher risks of a recession. Amid doubts that a 60/40 portfolio can still provide enough protection through times of market stress, gold's record shines bright.

Investment strategies

Buffett acolyte warns passive investors of mediocre future returns

While Chris Bloomstan doesn't have the track record of his hero, it's impressive nonetheless. And he's recently warned that today has uncanny resemblances to the 1990s tech bubble and US returns are likely to be disappointing.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.