Export Delaware recently caught up with Angela Foley, the state’s international trade representative in Sydney, Australia. Angela and her team help Delaware exporters find new customers in Australia and New Zealand. We recently caught up with Angela to hear about the current “state of play” in light of COVID-19, and how it will impact business in the next few years. Watch the full interview here or read the recap below.
Australia and New Zealand have been greatly impacted by COVID-19 and the pandemic has served as a major wakeup call for government and industry leaders. When 2020 began, Australia was entering its 29th year of economic growth. The young people of the nation have never experienced a recession. Now Australians are bracing for a 6.7% decrease in economic growth. The government has issued a $320 billion stimulus package, the largest it has ever issued. In New Zealand, they expect a 7.2% economic decline and have issued a $23 billion stimulus.
There is good news, however, as the IMF World Economic Outlook projects a “V-shaped rebound” of +6.1% rebound market growth in Australia and 5.9% in New Zealand in the year 2021.
Angela recommends that exporters plan for the future by thinking about short term wins and the long term vision and strategy beyond 2020. Don’t just react. There needs to be some kind of plan. Resources are key at this point and where you allocate them is important. Here’s what she advises for export managers and business owners.
Be Proactive and Plan for the Future
Many export managers are under a lot of pressure right now. They are used to being on the road and meeting face-to-face with customers. There is a concern for what’s coming next. It’s important to plan a strategy for when restrictions are lifted and evaluate where you will be able to achieve a return on investment. You can get the plan in place now!
Here are a few questions you should be asking yourself:
- How is my industry currently impacted? What is the future outlook?
- How are my existing clients and partners doing? How can I assist them?
- What relevant intelligence and advice can I get from the government, industry experts?
Strong market knowledge and responsible planning are key right now. Use the questions to help you formulate a plan moving forward.
Consider the Major Challenges Australia/New Zealand are Experiencing
Australia relies heavily on imports, specifically from China. Through the pandemic, the inbound supply chains were severely disrupted and there are shortages of critical items.
“When China stops, we are impacted here. We’ve received a wake up call,” says Foley
80% of medical equipment used in the country is imported (40% of this from the U.S.) and 90% of medicine and pharmaceutical products are imported.
In addition, China was the number one source of building materials for Australian development projects. 69% of furniture, 56% of glass, 40% nuts, screws, and bolts were imported from China.
Local companies have learned their lesson and are rethinking their strategy around sourcing. The nation as a whole is rethinking what they can do from a manufacturing perspective. There is a significant need for supply chain diversification, which opens up opportunities for Delaware exporters. Australia has a free trade agreement with the U.S. that’s quite attractive.
Look for Opportunities in Your Industry/Market
Certain industries have been affected more than others, and there are opportunities for new product adaptations and applications. In Australia and New Zealand there is a loud call for digital transformation. The crisis has accelerated digitalization across many industries. Many industries were forced to move online during the “stay-at-home order.” Online transactions, data analytics, training, and online education, cybersecurity, defense are all opportunity industries right now.
Australia and New Zealand are known as the clean food bowl of Asia. Food production is a top priority for both nations, with Australia adding 1 million hectares to grain production in 2020. But, stocks of essential farm inputs are running low, and there is a great need for fertilizer, chemicals, equipment (tractors, harvesters).
There is also a shortage of farm labor. Traditionally, farm labor has come from neighboring islands, but these individuals went home to the islands to isolate during the outbreak. The nation is embracing robotics and automation technology to improve efficiency and make up for the deficit of farm labor.
Digital Health Technologies:
There is a massive rollout of telehealth services now, with a $0.7 billion funding boost from the Australian government for telehealth and mental health. More money is being pushed into telehealth than ever before.
In addition to telehealth, there is a need for remote and mobile patient monitoring, online training, and courses to up-skill nurses. Smart tech to keep seniors/at-risk safe at home is also being evaluated.
In Australia, connections with hospital chains and government are critical to breaking into these industries and securing contracts.
Equipment challenges and shortages will be rectified by supplier diversification. Australia and New Zealand can no longer rely solely on China and are seeking new partners from around the world.
The government is building long term projects and has fast-tracked critical infrastructure developments to help drive up the economy. Projects that were planned for 2024 have been moved up in an attempt to keep money flowing through the economy.
Manufacturing shortages were the biggest wake-up call for Australia, and the nation is focusing on onshore production. Smart manufacturing and niche markets, food manufacturing, defense, mining, medical engineering are all of critical focus.
Australia and New Zealand have been majorly impacted this year, but that doesn’t mean there are no longer opportunities for Delaware exporters. The businesses that take this time to find short term wins and develop a long term strategy will survive. The businesses that thrive will be the ones who strategically identify the current needs of their customers, and find creative ways to solve them.
Angela and the Delaware state trade representatives are available to work with your business in providing market research, distributor and customer identification, and virtual zoom meetings for you with clients in their countries. The state has STEP grant funds to support these efforts. If you are interested in having a call with any of our trade representatives to discuss your needs, please contact Beth Pomper at Beth.Pomper@delaware.gov.