Australia to notch up another record year for resource exports

Australia’s earnings from energy and mining exports are forecast to set another record in the next 12 months, driven by an accelerating global economic recovery from the pandemic.

They are forecast to rise by nearly 8% to A$334 billion ($254 billion) in the year to June 30, 2022, “propelled by ongoing dwelling and infrastructure spending in many countries,” the Department of Industry, Science, Energy and Resources said in its latest quarterly report. Exports earnings in fiscal 2021 are seen at a record A$310 billion.

Rising earnings from liquefied natural gas and coal shipments are expected to drive the increase next year, with iron ore—which accounts for nearly half of resources earnings—seen easing from record levels. Bigger contributions are also expected from key battery metals such as copper, nickel and lithium.

But next year could prove to be the peak of the commodities upswing, with the government expecting revenues to moderate to A$304 billion in the 2023 fiscal year as economic growth starts to cool and prices soften as a result. The report also noted downside risks to its forecasts from a potential spike in global inflation and a sharper-than-expected tightening of monetary policy by major central banks, as well as delays in the rollout of Covid-19 vaccines.

“Another downside risk is the extent of further disruption to Australian resource and energy commodity trade with China, which took 45% of such Australian exports in 2020,” the report said.