Australia possesses a well-diversified economy boosted by the strength of its services and resources industries. In the past two decades, Australia has enjoyed a period of uninterrupted economic growth – an average of 3.3 percent in real GDP growth annually.
A vital component to this growth has been the gradual shift of markets by Australia’s industry sectors. Previously, Australia’s industry sectors main focus was to serve the needs of the European and North America markets; however Australia’s decision to turn its attentions to the East Asian markets, particularly China and Japan, has coincided with Australia’s recent economic progress.
Australia’s Industry Sectors
In 2010, Australia’s GDP was made up of agriculture (3.8 percent), industry (24.9 percent), services (71.3 percent).
Australia has a dynamic service industry which includes banking, insurance and finance; the media and entertainment industries; consulting, tourism and retail; services provided by government, such as education, health and welfare; and other personal and business services.
Among these industries, banking, finance and insurance are the best performers; providing the highest gross-value as well as being among the fastest growing industries in Australia. The Australian share market is the second largest in the Asia–Pacific region behind Japan, based on free-float market capitalisation. The Australian Securities Exchange is also the 11th largest stock exchange in the world going by market capitalisation.
While the service industry remains the backbone of Australia’s economy, Australia’s mining industry has been the catalyst for economic growth in the past decade. Large quantities of minerals and resources can be found in Australia. Australia has the world’s largest resources of recoverable brown coal, lead, rutile, zircon, nickel, tantalum, uranium and zinc, and ranks second in the world for bauxite, copper, gold, ilmenite and silver. Iron ore is another extremely valuable asset, with high demand from China.
This demand has led to massive Chinese investment in Australia’s mining industry. From 2007 to 2010, Chinese investment in Australia amounted to nearly US$60 billion. Australia’s mineral exports also grew by 55 percent to US$139 billion in 2010 and are projected to reach US$180 billion in 2011, thanks to China’s strong economic performance.
Read more about Australia's economy, including forecasts and trade statistics on EconomyWatch below.