Value of merchandise trade imports

IBISWorld forecasts the value of merchandise trade imports to rise by 5.3% in 2024-25 to $446.7 billion. A range of factors are expected to drive this growth, including increased consumer demand, economic recovery post-pandemic and strengthening the Australian dollar, making imports more affordable. Also, technological advancements and global supply chain improvements are anticipated to boost the availability of imported goods. Continued trade agreements with key international partners further facilitate the growth in merchandise imports.

Merchandise trade imports have experienced significant shifts in recent years, reflecting the country's economic landscape and global market influences. Following a decline in 2020 because of the economic downturn caused by the COVID-19 pandemic, imports began to recover as the economy reopened and demand surged. This recovery was especially pronounced in the years following the pandemic, driven by factors like increased consumer spending, global supply chain adjustments and the resumption of international trade activities. However, as the economy stabilised, the rapid growth in import values began to slow down, suggesting a shift towards more consistent and sustainable trade patterns. Imports are expected to continue growing at a more moderate pace as economic conditions normalise and the market adapts to post-pandemic recovery.

Also, the deterioration of most manufacturing industries over the period has meant that a larger proportion of domestic consumption has been satisfied by imported products. The resulting greater competition as a direct result of higher imports has forced some manufacturers to shift operations outside of Australia or shut down business entirely. This has further driven growth in imports throughout multiple supply chain tiers because of the lack of local competition in manufacturing industries. The share of total imports from China, Australia's largest trading partner for imports and exports, has increased over the past five years. This is partly attributable to the Chinese manufacturing sector's transition from producing elementary items like textiles to more sophisticated, high-value items like consumer electronics. Overall, IBISWorld forecasts the value of merchandise trade imports to rise at a compound annual rate of 8.4% over the five years through 2024-25.