Total Merchandise Imports & Exports

IBISWorld forecasts the total value of merchandise trade to decline by 3.2% in 2024-25, to reach $929.3 billion. This decline is primarily driven by a plunge in exports as global commodity prices moderate due to supply-demand imbalances. Australia’s exports heavily rely on the energy and resources sectors, including commodities like coal, natural gas and iron ore. As the prices of these commodities are projected to decline, export revenues will follow suit. The appreciation of the Australian dollar against the US dollar is also set to exert downward pressure on Australia’s export earnings. However, the shift towards a looser monetary policy is forecast to spur commodity demand and help offset the decline in total merchandise exports. China’s removal of tariffs on Australian wines and improved trade relations between the two nations are also expected to support the value of merchandise trade.

Over the past five years, the total value of merchandise trade has exhibited strong growth thanks to several key trends. The volume and value of resource and commodity exports like iron ore, lithium, wheat and LNG have contributed significantly to export growth over the period. Supply chain disruptions from the pandemic and the Russia-Ukraine conflict have propelled demand for Australian mining and agricultural exports. This supply shock has also boosted commodity prices, further lifting Australia’s export values over the past few years. As a result, many domestic producers have capitalised on the high commodity prices and ramped up production to meet rising consumer demand. However, as supply disruptions ease, many commodity prices start normalising, leading to a downturn in exports in the two years through 2024-25.