Industries taking on the strong AUD
Online shoppers are the winners when it comes to the strong AUD, with the Aussie boosting incomes from high commodity prices by increasing the community’s purchasing power of internationally produced goods and services.
While some industries are going through growth periods in the face of the strong AUD, notably imports and mining, which has had a massive investment boom, others that are in direct competition are suffering in comparison.
Offshore travel by Australians is at record levels but local tourism, retail and the tertiary education sector are showing weaker conditions, according to HSBC Global Research. So while some sectors of the economy are growing, and rapidly, others are beginning to slow down in order to make way for those on the up.
Much of the slow down has been in response to increasing numbers of Australians travelling overseas. The highest level of external departures on record, 33 percent, was recorded over the last year, which in turn has an effect on local retail spend and the manufacturing industry. This industry in particular has seen a decline in employment, however latest estimates suggest that manufactured export volumes have continued to rise despite the strong AUD.
The education export sector has also shown a drop in numbers over the past few quarters with local universities struggling to compete with the current exchange rate. Part of the reason for this decline however may be due to changes in slowing the issuance of student visas.
Despite the fact that some industries are decelerating in the face of the strong Aussie dollar, others are continuing to show strength, which can be taken as a positive outlook for Australia.