International trade in Western Australia: 2003-04 to 2005-06
INTRODUCTION
Western Australia's exports trade has benefited greatly from the continued expansion of the Chinese economy, as well as the recovery in Japan. Increased exports to both these countries have driven most of the state's exports growth in recent years, while the United Kingdom and other Asian countries have re-emerged as principal export markets. Strong demand from China has seen Western Australia's raw materials exports grow substantially, particularly for iron ore and nickel. However, Western Australia's other major export commodities, wheat and wool, have been much more variable due to the droughts in 2002-03 and 2005-06.
On the other side of the ledger, Western Australia's imports have also increased solidly in recent years. Imports growth has been mainly driven by the commodities of gold, petroleum, motor vehicles and machinery and equipment, predominantly from Singapore, Japan and the United States. Underpinning imports growth has been strong domestic demand and favourable terms of trade. Increased industry investment, particularly in the state's resources sector, has led to more imports of capital goods, while the overall rise in incomes and employment in the state have also strengthened the demand for imports.
CHANGE IN WESTERN AUSTRALIA'S TOTAL TRADE
The total value of Western Australia's exports increased by $15,502 million or 48.0% between 2003-04 and 2005-06, from $32,302 million to $47,805 million. A large proportion of this growth was due to higher exports prices, as the volume of exports rose by only 2.9% over the period. The total value of Western Australia's imports increased by $7,407 million or 63.4% between 2003-04 and 2005-06, from $11,690 million to $19,097 million. With growth in exports surpassing that of imports, the state's trade balance (exports less imports) rose from $20,612 million to $28,707 million over the period, an increase of $8,095 million or 39.3%.
CHANGE IN WESTERN AUSTRALIA'S TRADE BY COMMODITY
Western Australia's recent export growth was mainly driven by iron ore exports. Almost half (48.0%) of the state's exports growth between 2003-04 and 2005-06 was due to iron ore exports rising by $7,444 million (142.7%). Most of this rise was the result of higher iron ore prices, with only 22.8% of the increase attributable to more ore being exported from Western Australia. Exports of natural gas (up $1,918 million or 88.2%), crude petroleum oils (up $1,669 million or 45.8%) and non-monetary gold (up $1,634 million or 29.4%) were also major drivers of exports growth over the two year period.
GROWTH IN WESTERN AUSTRALIA'S TRADE, By commodity |
|  |
| | 2003-04 | 2005-06 | Change | Volume change | |
| Rank | Commodity | $m | $m | $m | % | % | |
EXPORTS | |
| |
| 1 | Iron ore | 5 216 | 12 661 | 7 444 | 142.7 | 22.8 | |
| 2 | Natural gas | 2 174 | 4 092 | 1 918 | 88.2 | n.a. | |
| 3 | Crude petroleum oils | 3 641 | 5 310 | 1 669 | 45.8 | -18.4 | |
| 4 | Non-monetary gold | 5 554 | 7 187 | 1 634 | 29.4 | -0.5 | |
| 5 | Combined confidential items | 6 759 | 7 688 | 928 | 13.7 | n.a. | |
| 6 | Copper ore | 110 | 636 | 526 | 479.8 | 63.0 | |
| 7 | Base metal ores | 150 | 397 | 247 | 164.3 | 188.3 | |
| 8 | Liquefied propane and butane | 386 | 669 | 283 | 73.3 | 6.0 | |
| 9 | Refined petroleum oils | 363 | 566 | 204 | 56.1 | -11.0 | |
| 10 | Wood chips | - | 198 | 198 | . . | . . | |
| 11 | Copper | 57 | 200 | 143 | 249.7 | 63.5 | |
| 12 | Nickel ores | 608 | 797 | 189 | 31.2 | 24.8 | |
| 13 | Nickel | 474 | 575 | 101 | 21.2 | 0.9 | |
| 14 | Machinery and equipment | 73 | 156 | 82 | 112.5 | n.a. | |
| 15 | Live animals | 359 | 435 | 77 | 21.3 | 20.8 | |
IMPORTS | |
| |
| 1 | Non-monetary gold | 1 974 | 4 352 | 2 378 | 120.5 | n.a. | |
| 2 | Refined petroleum oils | 573 | 1 803 | 1 230 | 214.5 | 62.2 | |
| 3 | Ships, boats and floating structures(a) | 29 | 688 | 660 | 2 312.2 | 1 882.8 | |
| 4 | Crude petroleum oils | 1 085 | 1 543 | 458 | 42.2 | -23.3 | |
| 5 | Motor vehicles for transporting goods | 420 | 714 | 294 | 69.8 | 24.6 | |
| 6 | Passenger motor vehicles | 954 | 1 236 | 282 | 29.5 | 38.0 | |
| 7 | Combined confidential items | 346 | 612 | 266 | 76.9 | n.a. | |
| 8 | Civil engineering and contractors' plant and equipment | 317 | 577 | 260 | 81.9 | 49.9 | |
| 9 | Tubes, pipes and hollow profiles | 145 | 298 | 153 | 105.1 | -25.8 | |
| 10 | Mechanical handling equipment | 87 | 174 | 87 | 100.7 | n.a. | |
| |
| . . not applicable |
| - nil or rounded to zero (including null cells) |
| (a) The large percentage increase in imports of Ships, boats and floating structures was due to a one-off purchase of a large floating offshore storage facility. |
| ABS data available on request, International Trade in Goods and Services, Australia, cat. no. 5368.0. |
The main commodities contributing to Western Australia's imports growth over the last two years have been non-monetary gold and refined petroleum oils. Imports of non-monetary gold more than doubled to $4,352 million between 2003-04 and 2005-06, rising by $2,378 million (120.5%). Refined petroleum oil imports more than tripled to $1,803 million over the two years, up $1,230 million (214.5%).
CHANGE IN THE COUNTRY COMPOSITION OF WESTERN AUSTRALIA'S TRADE
The pattern of Western Australia's international trade flows has remained fairly static in recent years. Asia continues to be the prime destination for the state's exports, driven by their demand for resource commodities, with the United Kingdom also featuring as a major export market. The state's imports are also predominantly sourced from Asia, as well as the United States and United Kingdom.
EXPORTS
Japan continues to be Western Australia's largest export destination, accounting for 22.9% of the state's total value of exports in 2005-06. The next largest export destinations were China (20.5%) and the Republic of Korea (8.6%). These countries have remained the state's three largest export markets since 2003-04. However, India, the 4th ranked export destination in 2003-04, fell to a ranking of 5th largest in 2005-06, while the United Kingdom moved up into 4th position from 5th.
Japan's 22.9% share of Western Australia's total exports in 2005-06 was an increase of only 1.4 percentage points from 2003-04. China's share of total exports increased by a far greater 6.9 percentage points, to hold a 20.5% share in 2005-06. The United Kingdom also recorded a solid increase of 1.1 percentage points during the period. The state's other major export destinations, the Republic of Korea and India, recorded declines in their share of Western Australian exports of 1.3 and 2.1 percentage points respectively, between 2003-04 and 2005-06.
WESTERN AUSTRALIA'S TRADE, By destination - 2005-06 |
| |
| | Share of total exports (imports) | Value | Rank in 2003-04 | |
| Rank | Country | % | $m | no. | |
EXPORTS | |
| |
| 1 | Japan | 22.9 | 10 960 | 1 | |
| 2 | China | 20.5 | 9 815 | 2 | |
| 3 | Republic of Korea | 8.6 | 4 126 | 3 | |
| 4 | United Kingdom | 7.1 | 3 370 | 5 | |
| 5 | India | 6.6 | 3 138 | 4 | |
| 6 | Singapore | 3.4 | 1 632 | 7 | |
| 7 | Thailand | 3.3 | 1 568 | 12 | |
| 8 | United States | 2.7 | 1 268 | 6 | |
| 9 | Indonesia | 2.5 | 1 216 | 8 | |
| 10 | Taiwan | 2.5 | 1 187 | 10 | |
IMPORTS | |
| |
| 1 | Singapore | 14.6 | 2 789 | 4 | |
| 2 | United States | 11.1 | 2 112 | 1 | |
| 3 | Japan | 10.9 | 2 087 | 2 | |
| 4 | China | 6.2 | 1 177 | 5 | |
| 5 | Indonesia | 6.0 | 1 155 | 3 | |
| 6 | Republic of Korea | 5.7 | 1 084 | 7 | |
| 7 | Thailand | 4.2 | 809 | 8 | |
| 8 | Malaysia | 4.1 | 787 | 6 | |
| 9 | United Kingdom | 3.6 | 694 | 11 | |
| 10 | Saudi Arabia | 3.2 | 608 | 12 | |
| |
| ABS data available on request, International Trade in Goods and Services, Australia, cat. no. 5368.0. |
IMPORTS
Singapore took over from the United States as Western Australia's major source of imports in 2005-06, accounting for 14.6% of the state's total value of imports. Singapore moved into 1st position from being the 4th largest source of imports for the state in 2003-04, while the United States fell to 2nd position, accounting for 11.1% of the state's total imports in 2005-06. These nation's were followed by large import shares from Japan (10.9%), China (6.2%) and Indonesia (6.0%).
Singapore's share of total Western Australian imports rose by 7.2 percentage points from 2003-04 to 2005-06, compared to a 0.4 percentage points decline for the United States. An increase in import shares was also recorded by China with 0.9 percentage points, while Indonesia and Japan recorded declining shares of Western Australian imports of 4.6 and 0.3 percentage points respectively, over the last two years.
DRIVERS OF WESTERN AUSTRALIA'S TRADE BY DESTINATION AND COMMODITY
Over half of Western Australia's export growth has been driven by China and Japan in the last two years, with much of the increase attributable to exports of iron ore. On the other hand, growth in Western Australian imports has been driven by petroleum and gold imports, mainly from Singapore, Japan and the United States.
EXPORTS GROWTH
The total value of Western Australia's exports increased by $15,502 million between 2003-04 and 2005-06, with exports to China accounting for 34.8% of the total increase and exports to Japan accounting for 25.9%.
The value of Western Australian exports to China increased by $5,401 million between 2003-04 and 2005-06, largely due to an increase in iron ore exports of $4,812 million (256.9%), from $1,873 million to $6,685 million. China was also a major destination for Western Australia's nickel ore exports, which increased by $175 million from 2003-04 to 2005-06. Processed nickel exports also increased to China from $83 million to $173 million over the period.
The value of Western Australia's exports to Japan rose by $4,018 million (57.9%) from 2003-04 to 2005-06. After China, Japan was the state's 2nd largest export destination for iron ore, with exports rising from $2,052 million in 2003-04 to $3,773 million in 2005-06 (up $1,721 million or 83.9%). Other major commodity exports to Japan were crude petroleum oils (up $359 million or 75.5%), liquefied propane and butane (up $242 million or 63.2%) and non-monetary gold (up $221 million or 136.5%). Exports of wood chips to Japan also showed a significant increase over the last two years, increasing by $193 million.
The state's exports to the United Kingdom recorded a large rise over the last two years, increasing by $1,451 million (75.6%). The United Kingdom was the 2nd largest destination for Western Australia's exports of non-monetary gold, almost doubling from $1,227 million to $2,373 million between 2003-04 and 2005-06 (up $1,146 million or 93.4%).
Western Australian exports have also risen to other Asian countries in recent years. The value of exports to the Republic of Korea rose by $916 million in the two years to 2005-06, mainly due to increasing iron ore and crude petroleum oil exports. Iron ore exports to the Republic of Korea rose from $717 million in 2003-04 to $1,263 million in 2005-06 (up $546 million or 76.1%). The Republic of Korea was the state's largest export destination for crude petroleum oil in 2005-06, rising from $918 million in 2003-04 to $1,365 million (up $447 million or 48.7%).
Non-monetary gold has been a major driver of Western Australia's exports growth to India and Thailand in recent times. India was the largest destination for Western Australia's non-monetary gold exports between 2003-04 and 2005-06, increasing from $2,671 million to $2,774 million (up $104 million or 3.9%). Western Australia's exports of gold also increased to Thailand, up by $468 million or 199.0% over the period.
GROWTH IN WESTERN AUSTRALIA'S EXPORTS, By selected destination and commodity |
| |
| | 2003-04 | 2005-06 | Change | |
| Country(a) | Commodity(b) | $m | $m | $m | |
| |
| China | Iron ore | 1 873 | 6 685 | 4 812 | |
| Nickel ore | - | 175 | 175 | |
| Nickel | 83 | 173 | 90 | |
| Total | 4 414 | 9 815 | 5 401 | |
| Japan | Iron ore | 2 052 | 3 773 | 1 721 | |
| Crude petroleum oils | 475 | 834 | 359 | |
| Liquefied propane and butane | 383 | 626 | 242 | |
| Non-monetary gold | 162 | 384 | 221 | |
| Wood chips | - | 193 | 193 | |
| Total | 6 942 | 10 960 | 4 018 | |
| United Kingdom | Non-monetary gold | 1 227 | 2 373 | 1 146 | |
| Iron ore | 103 | 143 | 40 | |
| Total | 1 920 | 3 370 | 1 451 | |
| Republic of Korea | Iron ore | 717 | 1 263 | 546 | |
| Crude petroleum oils | 918 | 1 365 | 447 | |
| Total | 3 210 | 4 126 | 916 | |
| Thailand | Non-monetary gold | 235 | 704 | 468 | |
| Crude petroleum oils | 221 | 551 | 329 | |
| Total | 725 | 1 568 | 843 | |
| Taiwan | Iron ore | 258 | 518 | 260 | |
| Crude petroleum oils | - | 45 | 45 | |
| Total | 792 | 1 187 | 395 | |
| Singapore | Crude petroleum oils | 682 | 941 | 260 | |
| Refined petroleum oils | 44 | 129 | 85 | |
| Total | 1 239 | 1 632 | 393 | |
| Papua New Guinea | Crude petroleum oils | - | 380 | 380 | |
| Total | 18 | 407 | 389 | |
| India | Non-monetary gold | 2 671 | 2 774 | 104 | |
| Copper ore | 8 | 108 | 99 | |
| Total | 2 812 | 3 138 | 326 | |
| New Zealand | Refined petroleum oils | 171 | 378 | 206 | |
| Crude petroleum oils | 156 | 193 | 37 | |
| Total | 471 | 763 | 292 | |
| |
| - nil or rounded to zero (including null cells) |
| (a) Top 10 export destinations for Western Australia. |
| (b) Commodities were selected based on their contribution to growth in country exports. |
| ABS data available on request, International Trade in Goods and Services, Australia, cat. no. 5368.0. |
| Totals include commodities not listed in the table. |
Crude petroleum oils was another major commodity contributing to Western Australian exports growth over the last couple of years. Thailand was a significant recipient of Western Australian crude petroleum oil, with exports rising by $329 million (148.8%), from $221 million to $551 million between 2003-04 and 2005-06. Papua New Guinea does not account for a major share of Western Australian exports, however, it did record a large increase in crude petroleum oil exports of $380 million over the last two years. Singapore was the 2nd largest recipient of Western Australia's crude petroleum oil exports, increasing from $682 million to $941 million (up $260 million or 38.1%).
Detracting from Western Australia's exports growth over the past couple of years has been farm sector exports. The value of wheat exported by Western Australia decreased from $1,785 million in 2003-04 to $1,614 million in 2005-06 (down $171 million or 9.6%), due to the 2005-06 drought and falling world wheat prices. Wool exports were also hampered by the 2005-06 drought, declining by $10 million (2.0%) between 2003-04 and 2005-06, from $502 million to $492 million. However, Western Australia began exporting wood chips again in 2005-06, with exports increasing by $198 million in that year.
IMPORTS GROWTH
The total value of Western Australia's imports increased by $7,407 million between 2003-04 and 2005-06, with imports from Singapore, Japan and the United States recording the largest increases. Imports from Singapore accounted for 25.9% of the rise in total imports, while Japan and the United States each accounted for 10.4% of total imports growth.
Singapore was Western Australia's largest source of imports in 2005-06, recording an increase of $1,918 million or 220.2% between 2003-04 and 2005-2006. Singapore was the state's largest source of refined petroleum oils, with imports increasing by $975 million (259.5%), from $376 million to $1,351 million over the period. Also contributing to the rise in imports from Singapore was non-monetary gold, which increased from $134 million to $1,078 million between 2003-04 and 2005-06 (up $944 million or 705.9%). Much of these gold imports are processed and re-exported.
GROWTH IN WESTERN AUSTRALIA'S IMPORTS, By selected destination and commodity |
| |
| | 2003-04 | 2005-06 | Change | |
| Country(a) | Commodity(b) | $m | $m | $m | |
| |
| Singapore | Refined petroleum oils | 376 | 1 351 | 975 | |
| Non-monetary gold | 134 | 1 078 | 944 | |
| Total | 871 | 2 789 | 1 918 | |
| Japan | Non-monetary gold | - | 323 | 323 | |
| Refined petroleum oils | - | 122 | 122 | |
| Passenger motor vehicles | 612 | 690 | 79 | |
| Total | 1 315 | 2 087 | 772 | |
| United States | Non-monetary gold | - | 345 | 344 | |
| Motor vehicles for transporting goods | 152 | 257 | 105 | |
| Total | 1 340 | 2 112 | 771 | |
| Republic of Korea | Ships, boats and floating structures | - | 551 | 551 | |
| Refined petroleum oils | - | 136 | 135 | |
| Total | 461 | 1 084 | 623 | |
| China | Ships, boats and floating structures | - | 29 | 29 | |
| Rubber tyres | 10 | 35 | 25 | |
| Total | 613 | 1 177 | 564 | |
| United Kingdom | Non-monetary gold | 14 | 274 | 259 | |
| Passenger motor vehicles | 22 | 38 | 17 | |
| Total | 314 | 694 | 380 | |
| Saudi Arabia | Crude petroleum oils | 180 | 499 | 318 | |
| Refined petroleum oils | - | 7 | 7 | |
| Total | 246 | 608 | 361 | |
| Thailand | Non-monetary gold | 145 | 388 | 243 | |
| Motor vehicles for transporting goods | 89 | 186 | 98 | |
| Total | 448 | 809 | 360 | |
| United Arab Emirates | Crude petroleum oils | 153 | 347 | 194 | |
| Ships, boats and floating structures | 1 | 35 | 34 | |
| Total | 170 | 431 | 261 | |
| Malaysia | Non-monetary gold | 11 | 193 | 182 | |
| Civil engineering and contractors' plant and equipment | - | 14 | 13 | |
| Total | 550 | 787 | 237 | |
| |
| - nil or rounded to zero (including null cells) |
| (a) Top 10 sources of imports for Western Australia. |
| (b) Commodities were selected based on their contribution to growth in country imports. |
| ABS data available on request, International Trade in Goods and Services, Australia, cat. no. 5368.0. |
| Totals include commodities not listed in the table. |
The value of imports sourced from Japan increased significantly between 2003-04 and 2005-06, rising by $772 million (58.7%). This increase was largely due to non-monetary gold imports rising by $323 million over the two year period, while imports of refined petroleum oils also contributed significantly (up $122 million). Japan was the largest source of passenger motor vehicles for Western Australia, with imports increasing from $612 million to $690 million over the period (up $79 million or 12.9%).
The United States was the 3rd largest source of imports for Western Australia in 2005-06, with a rise in imports of $771 million (57.5%) from 2003-04. Imports of non-monetary gold (up $344 million) and motor vehicles for transporting goods (up $105 million or 68.8%) were the two major commodities purchased from the United States by Western Australia over the last two years.
There was also a significant increase in petroleum imports from Saudi Arabia and the United Arab Emirates in recent years. Crude petroleum imports rose by $318 million (176.4%) from Saudi Arabia and by $194 million (126.9%) from the United Arab Emirates between 2003-04 and 2005-06.
Despite Indonesia being Western Australia's 5th largest source of imports in 2005-06, it recorded a decline of $91 million (7.3%) in the value of imports to Western Australia from $1,246 million in 2003-04 to $1,155 million in 2005-06. However, this decrease in imports from Indonesia was relatively small. Indonesia remained a major source of crude petroleum oils for Western Australia, with imports increasing by $68 million (27.4%), from $248 million to $316 million over the two year period.
WESTERN AUSTRALIA'S TRADE IN SERVICES
The availability of detailed international trade in services data is fairly limited at the state level, although the State accounts provide some estimates at an aggregate level. Between 2003-04 and 2005-06, Western Australia's exports of services increased by $432 million (13.7%) in current price terms, from $3,148 million to $3,580 million, while services imports rose by $683 million (21.2%), from $3,228 million to $3,911 million. As a result, the state's trade deficit in services rose from $80 million to $331 million over the last two years, an increase of $251 million or 313.8%.
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