The Austrade Economics Team launches inaugural State of Exporters report

An Austrade economist explains what makes the inaugural Austrade’s State of Exporters Report unique.

By Anne-Louise Knight

The State of Exporters report is the first of its kind. We use firm-level data to examine the characteristics of Australian exporters, quantify the benefits of exporting to the Australian economy and measure the impact of the COVID-19 pandemic on firms. We also analyse key findings about Australia’s exporters and non-exporters.

What makes the State of Exporters report unique is that we use data from the Business Longitudinal Analysis Data Environment (BLADE) from the Australian Bureau of Statistics. This provides the most comprehensive level of economic indicators on Australian firms.

It compares the characteristics of exporting and non-exporting firms, and thereby provides robust evidence on the economic benefits of exporting. The report also provides an in-depth analysis of the impacts of the COVID-19 pandemic shocks on Australian firms.

What we found

• Exporters generated more than A$1.56 trillion in turnover and contributed more than A$646.6 billion value added to the Australian economy in 2020-21. This is equivalent to 31% of nominal GDP.
• Almost 3 million people were employed by Australian exporters or supported by demand from our international trading partners. This equates to 23% of the Australian labour force.
• Compared to non-exporting firms, exporting firms generate 14% more employment and 65% more value added.This equates to 10 additional employees per company.
• When comparing firm performance, exporters are 64% more productive and pay 43% higher wages than non-exporting firms.
• We find that exporting is associated with a higher probability of firm survival. On average, between 2018-19 and 2020-21, an exporter was 9% more likely to have survived the early years of the COVID-19 pandemic than a non-exporter with similar characteristics.

Services exporters generate the most value and employment

Services exporters generated the most value added and also employed the most people. Leading this sector are education and training exporting businesses, who have the largest number of employees on average.

Services exporters paid some of the highest wages. Exporters in several sectors – including financial and insurance services, information media and technology, and professional and scientific services – paid the highest wages after the mining industry.

Finance and insurance services companies were also the most productive on average. They generated the highest median labour productivity followed by wholesale and retail trade. This is despite the fact that the data on services exporters in BLADE likely underrepresents the contribution that services exporters deliver to the Australian Economy.

Business survival

The global economic shocks during 2020-21 severely disrupted exporting activities. The value of goods and services exports declined at the start of the COVID-19 pandemic but have since rebounded in response to high commodity prices.

Given that exporting companies are more vulnerable to global economic risks, any benefit from exporting in terms of higher firm survival rates is noteworthy.

• We found that exporting is associated with a higher probability of firm survival.
• On average, an exporter was 9% more likely to have survived than a non-exporter with similar characteristics between 2018-19 and 2020-21.

Export markets and diversification

China remains our largest destination market for exports, in value terms. This reflects the strong complementarity of our two economies.

At the same time, Australian businesses have diversified their export markets to include more destinations by capitalising on new market opportunities. Following China, Australia’s top export market destinations in 2020-21 by export value were, Japan, Korea and the United States.

As measured by the number of exporters, Australia’s top export destination in 2020-21 was New Zealand (16,394 exporters), with nearly double the number of exporters selling to this market over any other. This suggests that Australian exporters may find it easier to export to New Zealand, given the geographical proximity and cultural and consumer similarities with Australia.

The United States and China were our second and third most popular markets, by number of exporters. This likely reflects their status as the world’s largest consumer markets.

We would like to thank:

• the Australian Bureau of Statistics for their support in preparing this report together
• IP Australia
• the Department of Foreign Affairs and Trade
• Department of Industry, Science and Resources
• Department of Treasury and Supply Nation.