Victoria—education exports set to grow steadily
Services remain Victoria’s largest export sector, contributing A$18b in 2016 and growing 7% p.a. over the last five years. Education has been a major source of growth—with enrolments up 10% p.a. over the last five years. Growing incomes in Victoria’s largest services export markets—China, India, Malaysia and Vietnam, 60% of enrolments—and a weaker AUD have been positive for the education sector. Adding further upside is the 2013 change to student visas, which allows foreign students to apply for a four year post-study work visa.
Using projections from Deloitte Access Economics on total foreign enrolments in Australia, and assuming Victoria’s current market share remains constant, the number of foreign students studying in Victoria is expected to grow between 3% and 7% p.a. to 2025. This translates into export earnings of between A$11b and A$16b by 2025, up from A$7b currently (Chart 2).
Policy uncertainty has weighed heavily on foreign enrolments in the US—39% of US universities have experienced a decline in 2017 applicants. Conversely, foreign enrolments in Australia were up 13% y/y in the opening two months of 2017. Australia’s strong standing internationally could see this trend continue.