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Don’t wait for the Australian Dollar to drop, Trade Now!

Release Date

05 March 2013

The strength of the Australian dollar has been the catalyst behind Australian exports falling since late 2010. The dollar weakens and strengthens against various currencies globally and has been volatile for the last 12 months. The NSW Business Chamber understands that this has a significant impact on Australia’s export ability.  Unfortunately the reality for Australian exporters despite the predictions of the Australian dollar easing is that there will not be a strong enough drop in the dollar for Australian exporters to see any real significance.

This should not alter your drive to expand your export market. There are always unique advantages which Australia can deliver i.e. location, innovation, quality and also the amount of respect we have within the Asian region.

Globalisation is no longer just a trend in today’s society, it is now the most dominant business environment around the world and as a result of this new patterns of trade are clearly beginning to emerge.

The global economy is experiencing a net re-distribution of wealth towards the rapid growth economies around the world like Asia for example. This is a process that has been accelerated by financial downturns both past and present and indeed the economic recessions that it has caused. Companies that are within these rapid growth markets including Australia are now challenging the giant corporations that sit on the Forbes and Fortune lists of today.

The global economy is witnessing an outpouring of investment from the west to the east, some of it is speculative forecasting but much of it is a result of individual businesses, both large and small making solid business decisions, including trading now!

Australian exporters may need to evaluate what their export goals truly are. Where do you want your product today, next week, next year? Purely focussing on West to East lines of trade completely misses the inter-regional trade in Asia and the ever evolving Asian production moving in to Western economies. Broaden your International trade mind to see some results. Focussing all your business flows on markets of the last decade like the USA and Europe completely misses the far greater increase that is happening with our regional trading neighbours a lot closer to Australia, particularly India and China. Additional focus should be placed on the 10 countries of ASEAN to see the trading opportunities completely accessible to Australian exporters and support with a comprehensive multilateral free trade agreement.

It has been noted that global trade did indeed collapse during the financial crisis in 2009. However as shown by (Graph A) global trade has since bounced back strongly, led by Australian trade among emerging markets.

What remains somewhat of a mystery is whether these key economic indicators of the past decade will be expected to extended in to the current one? It is yet to be seen whether the most recent financial crisis has changed the dynamic of the global economy, and therefore resulted in the changing patterns of International Trade.

Australian Exporters can set a catalyst for how International Trade patterns will evolve in the future. You only need to look at (Graph A) to see that global trade has recovered and is continuing to recover in the wake of the latest financial crisis. The Australian exporter must put in place new strategic expansion strategies in the International Trade planning process.

Australian businesses will need to alter their International Trade strategies to emulate the changing global patterns in world trade. These patterns are set to re-invigorate trade and Australian businesses are encouraged to help this shift over the next decade.

World Exports

Graph A
Source:- Oxford Economics/Haver Analytics
 
If you need help in expanding your export markets throughout Asia and the Middle East, Australian Business Consulting & Solutions, part of the NSW Business Chamber, can be of assistance through all stages of your export journey.

So again don’t let the high Australian dollars volatility deter your expansion throughout Asia and the Middle East.

For more information please contact Mr Ian Bennett – Senior Manager – International trade- Australian Business Consulting & Solutions on 1800 505 529 or via info@australianbusiness.com.au  

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