Media Release

Wednesday, 29 August 2003 - MVT66/2003

Continued Global Downturn Challenges Australian Exporters

The continuing impact of a soft global economy was highlighted in July’s 2003 International Trade in Goods and Services Data, Trade Minister Mark Vaile said today.

“The end of the SARS epidemic has brightened the outlook for our services exporters, but a quick global economic recovery, the end of effects of the drought on farm production and an improvement in the international security outlook are also needed,” Mr Vaile said.

The July 2003 balance on goods and services was a deficit of $2.4 billion in seasonally adjusted terms, an increase of $320 million from June.  Services exports rose by $111 million in the month of July.

“The rebound in our services exports following the SARS epidemic clearly demonstrates the resilience of our services export sector and I am confident that given a turn around in the global economy we will see a similar resilience shown by our merchandise export sector,” Mr Vaile said.

While rain has fallen over large parts of Australia in the last month, the drought continues to impact on rural goods exports, which fell by $24 million in July 2003, in seasonally adjusted terms.  Compared with July 2002 in seasonally adjusted terms, rural exports fell 26 per cent in July 2003.

Reflecting the continued impact of the soft global economy, non rural and other goods fell by $530 million seasonally adjusted in the month of July 2003.

“Increases, in original terms, in July exports to most of our major East Asian trading partners gives some room for optimism that we might be seeing for the first time a turn around in global growth,” Mr Vaile said.

In original terms, merchandise exports to East Asia rose 1 per cent in the month of July, with strong growth recorded in China (up 16 per cent), Malaysia (up 14 per cent),  Indonesia (up 7 per cent), Japan (up 5 per cent), Korea (up 3 per cent) and Hong Kong (up 2 per cent).   Encouragingly, merchandise exports also rose to the US by 12 per cent in the month of July – the second consecutive monthly increase.

Contact:  Matthew Doman  02 6277 7420