Despite resilience in iron ore, Australian exports suffer from global woes
Australian exports entered the COVID-19 crisis already reeling from devastating bushfires and drought that had weakened agriculture and tourism exports. Exporters have since suffered from the global recession (Chart); total exports fell almost 8% in Q3 2020 compared to Q3 2019, driven by a broad-based decline in the rural, manufacturing and services sectors.
That is despite rising exports of metal ores and minerals—predominately iron ore—up 4% on a year-ago basis in Q3 2020. Iron ore export receipts topped more than $100 billion in 2019-20, a record high, supported by supply issues in Brazil and robust industrial demand from China. China’s fiscal stimulus of CNY3.75 trillion (about 4% of 2019 GDP) is similar in level to the stimulus provided for infrastructure spending during the 2008-09 global financial crisis. Strength in metal ores exports has been particularly important during a sustained period of low international travel and external headwinds for consumption exports.