Australian Economic Overview

(Last updated August 2011)

Australia boasts an outstanding economic track record and offers UK businesses a dynamic yet dependable market in times of economic uncertainty. Add to that a technology-hungry and sophisticated business and consumer base, very similar language, culture, history and business practices, and you have outstanding opportunities for British business. Harvard Business Review named Australia as its No. 1 country to invest in Jan/Feb 2011.

Australia has had one of the best-performing economies in the industrialised world in recent decades. It has not suffered a recession for the past 20 years.  This success reflects many factors, including sound economic management, strong population growth, a rich endowment of natural resources (particularly mining) and close ties to the boom economies of Asia.

But the country faces a number of challenges. Though a source of great wealth, the mining boom is creating imbalances that require careful management. A high dollar is hurting trade-exposed sectors like manufacturing, tourism and even retail. And productivity growth is particularly weak.

Business links are strong

The UK is Australia's second largest trade services partner and also its seventh largest two-way trading partner. The total two-way trade in 2009-10 amounted to nearly A$22 billion. The UK is the second largest foreign investor in Australia, with stock worth A$473 billion as of December 2010.

The total investment by Australian interests in the UK was worth A$192.3 billion in 2010 (Austrade). This makes the UK Australia's second most important foreign investment destination.

Total bilateral trade and goods and services has grown by 46% in real terms from 1999 to total £11.4bn in 2009. About 1000 UK companies are in Australia, including many of the big names like BP, Cadbury Schweppes, HBOS, Vodafone, RBS and Virgin Atlantic.

Australia's economy ranks among the 20 largest in the world, with a per capita GDP on par with the four richest West European economies. The Australian labour force is highly educated. Approximately 42 per cent of Australia's working age population has a university degree, diploma or trade qualification.

Some facts and stats:

• More than 2,500 companies from the UK and Australia do business in each others’ countries every day.  
• The World Bank ranks Australia 10th in the world for overall ease of doing business
• Australia is ranked 2nd for starting a business and 6th for getting credit. It takes only two days to start a business
• The Australian Government's trade policy combines multilateral, regional and bilateral approaches. Australia pursues every opportunity to open up global markets for exporters and to encourage investment flows across all sectors
• Australia is a springboard into Asia with free trade agreements with ASEAN (South East Asian nations and New Zealand), Singapore, Thailand, USA and Chile
• Australia has a number of free trade agreements that are under negotiation, including China, Gulf Cooperation Council, Japan, Korea, Malaysia and Pacific nations
• Australia has a double taxation agreement with the UK
• Australia's laws provide comprehensive protection for intellectual property
• Imports from the UK continue to grow, year on year, as does the Australian population
• With a very favourable exchange rate with the British pound and the Australian dollar, UK products are much more competitive downunder

Download the Doing Business in Australia guide for more information about the Australian market.

Contact UKTI in Australia and find out how we can help your business grow.