SA exports tipped to slow
South Australian export growth is set to decline according to a new report from Deloitte.
The Deloitte Access Economics’ quarterly Business Outlook report forecast South Australia’s International export growth will drastically decrease in coming years, from a growth of 20.7 per cent in the 2022/23 down to 12.9 per cent in 2023 to 2024.
This reduction is forecast to continue down to 0.9 per cent in 2024/25.
South Australia’s exports have experienced record levels in recent years, having grown to $17.9 billion in the 12 months ending in November 2023.
As of January this year, China was South Australia’s largest export destination, with a year-on-year increase of 46 per cent, equating to $3.2 billion.
International import growth is forecast to decrease in South Australia as well, from a 15.4 per cent growth in 2022 to 2023 down to 11.5 per cent forecast for 2023 to 2024, and 6.9 per cent the following period.
The report foresees a slow in South Australia’s overall economic growth, with a weak outlook for net exports offsetting an increase in household spending.
“The level of economic activity is below the level that might have been expected in the absence of the pandemic, even though inputs of capital and labour are higher,” said report lead author Stephen Smith.
“That means that the lingering inflation in the economy is predominantly being caused not by too much demand, but by other factors.
“For example, the housing shortage is pushing up rents, previously high inflation is causing ‘administrative’ price increases for items like school fees, and insurance premiums are rising because of earlier increases in the cost of claims.”
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The report forecasts less than one per cent of growth in gross state product in 2024 to 2025 for South Australia.
South Australia was the only state or territory to record declines in household demand for two consecutive quarters, in both September and December quarters last year.
The state’s household consumption increased by half a per cent in the March 2024 quarter, with Deloitte reporting population growth was the largest constraint on consumption growth.
The report forecasted household consumption in South Australia would increase by one and a half per cent in 2024/25, bringing it in line with the national average.
Deloitte’s report comes as CommSec’s State of the States report ranked South Australia’s economy as the number one in the nation for the third time in a row.
