Trade links help Australia avoid recession

A strong economy and the prospect of further growth are two important factors any business investor will look for in an area. Fortunately for anyone leasing commercial property at the moment, Australia seems to be bucking the international trend and giving commodity exporting companies something to smile about.

A report from BIS Shrapnel has pointed out that while some parts of the world have struggled to maintain momentum in this area, the same cannot be said for Australia. Other nations such as Canada have slipped into recession because of a fall in commodity prices, but for these shores, the scenario couldn't be more different.

Queensland's export market

Like many other parts of the country, Queensland relies strongly on its export market. The latest data from the Queensland government shows that during the year to January 2016, the value of export activity increased 11.9 per cent.

Rural goods have offered many lucrative opportunities for local businesses, who might be keen to secure commercial property on the Gold Coast as a result. There has been a 14.9 per cent annual rise in the exportation of meat, while other rural goods were up 6.3 per cent.

The greatest increase in export value was seen in the crops sector up 137.4 per cent year on year – while the biggest decrease was registered for cotton. China was named the primary export destination for Queensland, while Japan ranked in second place and the Republic of Korea in third.

Why the results are so strong

One key question remains why and how has Australia managed to avoid the recession experienced in other developed nations? BIS Shrapnel explained that a rise in education and tourism activity has helped sustain the economy, while low-cost exports has meant the country has been able to remain competitive.

The recent tourism boom has partly been supported by falls in the Australian dollar, which have made this a more attractive and affordable destination for travellers. Improved transport links in the Gold Coast and other areas have also made travel much simpler for overseas visitors.

There's also the fact that Australia isn't a major player in the oil market, which has witnessed some of the greatest price falls over recent months.

Australia is a low-cost, high quality resources exporter, and other countries simply cannot compete with that," acknowledged BIS Shrapnel Chief Economist Frank Gelber.

"While prices have fallen dramatically, export volumes are growing strongly as projects come on stream."

Where problems might arise

The group was keen to point out that Australia is not completely immune from the difficulties seen in the global export market. Iron ore is a major commodity for this country, which BIS Shrapnel reveals has witnessed significant price falls over recent months.

Nevertheless, many Australian mines have significantly lower production costs than their overseas counterparts, which could mean the country is much better placed to weather the storm.

Dr Gelber believes Australia is currently heading for a correction phase, which will "constitute a major negative shock to the Australian economy". This is partly due to the fall in resources sector activity, which has meant the economy has had to readjust and find new sources of support.

For the time being at least, Queensland and Australia as a whole seem to be on the right track and there are high hopes the national economy will continue to thrive.

If your company wants to make the most of this recent positivity, give our team a call. We're experienced at finding suitable commercial property on the Gold Coast and surrounding areas and can help you invest in a thriving part of the country.