Australia is the second largest economy in the entire world regarding wealth owned per every adult after Switzerland. Australia has a mixed market economy, and it is the largest mixed market economy having a total Gross Domestic Product (GDP) of around A$1.69 trillion. A mixed market economy is defined as the type of economy in which both the private and public sector share the means of production; it is also sometimes referred to as the dual economy. Various industries in Australia have played a major role in ensuring that the economy of this great nation remains constant and at the top. There are several major industries in Australia as discussed below.
Service industry comprises over 70% of the GDP. It dominates the economy, which employs over 79% of the labor force. An indicator of this sector’s diversity employment ranges from high pay to low pay; the part time full time and little skill, semi-skill and low skill and also hold one of the most educated, multi-lingual and multi-cultural workforces globally. The industry also engages tourism, media and entertainment, healthcare, logistics, education, and finance sectors as described below.
Australia is one of the most desirable travel destinations because of its beautiful natural landscape, coastal areas, red deserts, and rainforests. More than 7 million visitors came to Australia in 2017 attracted by beautiful sandy beaches, unique flora and fauna, the hospitality of the people and world-class food and wine. All this adds 38 billion AUD to the economy employing approximately one million people. The high number of tourists comes from China, Singapore, Japan, Great Britain and the United States.
Healthcare is Australia’s fourth most significant contributor to the GDP and was ranked the second-best healthcare system in the world, according to commonwealth fund’s 2017 report. Currently, 13 percent of the workforce is employed in the industry and is projected to increase to 15 percent by the year 2020. Furthermore, 160,000 other full-time jobs will be added with the launching of the National Disability Insurance Scheme (NDIS). With the world-class medical research and healthcare infrastructure, Australia is regarded as one of the best places to conduct clinical trials and medical investigations.
Media and Entertainment
Media and entertainment industry accounts for $29.1 billion that is comprised of $17 billion in direct output. Seven percent of it is generated online, and $25.1 by offline media, which captures value added created by capital inputs and labor of about 45,000 full-time equivalent workers, are employed directly in the industry. Advertising is estimated to contribute $40 billion to the economy.
With a sophisticated modern financial sector, Australian Strong economic performance and experience makes Australia a preferred place to do business and a global commercial hub. In 2015, World Bank ranked Australia the fastest place to start a business. This business service sector is worth 1.7 trillion AUD and adds up to 11 percent of the national GDP equivalent to 118 billion AUD, which has attracted investors from within the country, Asia, and from all over the world.
Mining is a driving force for the exploration of remote Australian lands and industrial advancement with more than 120 billion AUD currently invested in new projects. GDP from mining increased to 26 billion AUD in the first quarter of 2018 from 24 billion AUD in the fourth quarter of 2017. The sector is maximizing on the plentiful of natural resources that are in exploration, extraction, and processing like coal, mineral sand, gold, copper, uranium, bauxite, iron ore, nickel, lead, zinc, diamonds, and natural gas. Australia is the world’s largest miners of bauxite, iron ore, lead, and zinc, which generates earnings of about 245 billion AUD in exports earnings. The mining industry has over six hundred publicly traded companies.
The manufacturing industry currently contributes to 6 percent of the GDP, exports 96 billion AUD worth of goods, and employs 860,000 people. Big companies like Boeing and General Electric are significant investors in this crucial industry. Although from 2008 to 2014, the industries output had declined by 13%, the sector stabilized and remained most significant. In the past year, data from Bureau of Statistics indicate that 40,000 new manufacturing jobs have been created. The manufactured goods sold to international markets have also grown dramatically.
The agricultural sector accounts for three percent of Australian GDP at the farm and twelve percent if value addition through processing is done beyond the farm. In 2017, agriculture contributed to 0.5% increase of the total 1.9% increase in the GDP. It has employed over 300,000 people and covered 60% of the land mass. Generally, over $50 billion and about 60% of the farms’ produce is exported annually making 14% of the total export. The products exported by this nation include horticultural products such as fruits, nuts, and vegetables. Viticulture and wine production is also a boost to the agricultural industry as it is 30% of the sector and 7000 winegrower’s vineyard covers 40,000 hackers. In 2017, 1.98 million tons of wine grapes were crushed in approximately 2500 wineries that employ 173,000 full time and part-time employees.
Trade is another significant sector in Australia. The leading country that does business with Australia is China ($155 billion), the United States ($64 billion), Japan ($61 billion), South Korea ($32 billion), the United Kingdom ($29 billion), and also with New Zealand and Singapore. The primary products are minerals including gold, natural gas, and iron ore as well as agricultural goods and products like beef, wool, wine, sugar, and chickpeas. The other important export is services like education as hundreds of thousands of international students go to Australia to get tertiary education. Australia spends the most significant import on travels and tourism ($29 billion) followed by motor vehicles ($21 billion), telecommunications equipment ($12 billion), international freight ($9 billion), and refined petroleum ($15 billion). The Australian government also has bilateral free trade agreement deals with the United States, the ASEAN nations, New Zealand, Singapore, Thailand, Chile, Malaysia, Korea, China, and Japan. It is also a signatory of Trans-Pacific Partnership and pacific agreement on closer economic relations with 14 island nations.