Australia boasts one of the world’s strongest economies, with extensive connections and partnerships in Asia, South America, and North America. This allows Australia to maintain a dynamic and foreign-friendly economy that can easily adapt to global market changes. As the economy has grown, the country has transitioned from manufacturing to a more service-focused industry. This shift has led to significant success in the services sector, creating a ripple effect of opportunities for foreign businesses and investors.
The service industry in Australia is experiencing exponential growth. Just 25 years ago, business-to-business services accounted for less than 20% of the country’s gross value added (GVA). Now, it makes up over 25% of the GVA, demonstrating remarkable growth in a relatively short period. In 2017, the service industry accounted for 70% of Australia’s GDP and employed 80% of the workforce. With these impressive numbers and predictions of further growth, Australia is on track to become a top service exporter worldwide.
Australia excels in exporting various services to markets globally. In 2016, top service exports included education, recreational travel services, professional services, business travel services, and financial services. The country’s service industry is set to continue growing through free trade agreements and partnership opportunities, particularly in Latin America. Australia’s FinTech industry is also widely recognized as one of the strongest and most innovative globally.
Education is Australia’s third largest export, including all other services, manufacturing, and mining. The education export industry experienced over 22% growth in 2017 alone, making it the largest service industry export for Australia. This growth in education abroad creates opportunities for foreign investors, businesses, and job growth. Other notable service sectors for investment and incorporation in Australia include travel/tourism and FinTech, which have seen significant increases in foreign direct investment.
Australia’s service industry has enjoyed consistent growth over the past 15 years, averaging 5% annual growth. As the sector continues to expand, employment opportunities are increasing for both Australian citizens and foreigners. In recent years, there has been a reported “skills shortage” in the country, leading to higher wages and benefits to attract skilled employees. The Australian Industry Group’s Performance of Services Indicator (PSI) shows that the service industry is continuously growing and innovating, with a PSI score of 59 in April 2018.
The growing demand for B2B services in Australia is expected to stimulate the economy further. Experts predict an average annual real GDP growth of 2.8% from 2019 to 2023, positioning Australia among the highest forecasted growth rates globally. This presents significant opportunities for investors and businesses to see substantial gains on their investments in the next five years. The favorable conditions make it an ideal time for those looking to enter the Australian market.
Australia is ranked as the fastest and easiest country to start a business, according to economists in 2015. The foreign-investment-friendly laws, numerous trade agreements, and thriving financial and business service sectors make it simple for foreign entrepreneurs to tap into the Australian market. The broad scope of the service sector, which intersects with various industries like finance, tourism, mining, education, and manufacturing, offers flexibility and adaptability. The sector continues to develop opportunities, particularly in industries receptive to value-add technology.
With the ongoing growth and success of Australia’s service sector, global players are increasingly interested in entering the market. It is essential to take advantage of the opportunities offered by the country and its service industry. If you want to learn more about the industry or need assistance starting your own business, Biz Latin Hub can provide back-office commercial representation services to guide you towards success. For further inquiries, reach out to our team.
