Statement of Current Economic Position

SOUTH AUSTRALIA

Current Economic Conditions in South Australia

The South Australian economy has exhibited resilience in the face of the COVID-19
pandemic, demonstrating its adaptability and strength. While certain sectors have faced
challenges due to the pandemic's disruptions, others have emerged as drivers of growth and
recovery.

One of the key strengths of the South Australian economy is the state's advanced
manufacturing sector. South Australia has established itself as a hub for advanced
manufacturing, particularly in areas such as aerospace, defence, and medical technology.
This sector is driven by innovation, skilled labour, and a supportive government
environment, contributing to economic diversification and job creation.

However, the COVID-19 pandemic has also presented challenges for the South Australian
economy. The tourism industry, a significant contributor to the state's economy, experienced
a sharp decline due to travel restrictions and health concerns. The retail sector has also
faced challenges due to subdued consumer spending and rising costs.

Despite these challenges, the South Australian economy is showing signs of recovery. The
easing of travel restrictions has led to a gradual rebound in the tourism industry, and the
state's strong focus on renewable energy and advanced manufacturing is positioning it for
continued growth.

Unemployment Rate: In South Australia, the unemployment rate as of September 2023 was
5.3%, slightly below the national average of 5.5%. This indicates that the state's labour
market is relatively healthy and that there are opportunities for people to find work.

Gross State Product (GSP): GSP is a measure of the state's economic output and is
considered a broad indicator of economic health. In 2022, South Australia's GSP was $128.6
billion, representing a growth of 5.1% from the previous year. This growth suggests that the
state's economy is expanding and creating wealth.

Retail Trade: Retail trade is a major sector of the South Australian economy, accounting for
a significant portion of jobs and economic activity, providing insights into consumer
spending patterns and overall economic conditions. In South Australia, retail sales in August
2023 were $3.8 billion, representing a growth of 4.5% from the previous year. This growth
indicates that consumer spending is recovering from the COVID-19 pandemic and
contributing to economic activity.
Tourism: Tourism is a vital sector for South Australia, generating revenue and employment
through visitor spending. In South Australia, tourism expenditure in the year ending June
2023 was $6.8 billion, representing a recovery from the pandemic's impact. This suggests
that the tourism industry is gradually regaining its momentum and contributing to the state's
economy.

Mining: Mining is a significant industry in South Australia, contributing to the state's export
earnings and economic diversification. In South Australia, mineral production in 2022 was
valued at $21.2 billion, representing a stable performance despite global economic
uncertainties. This indicates that the mining sector is a resilient contributor to the state's
economy.

Key South Australian Industries

Key Current Industries

Renewable Energy: South Australia is a leader in renewable energy development, with

world-leading wind and solar farms generating a significant portion of the state's electricity.

Advanced Manufacturing: South Australia has a growing advanced manufacturing sector,

with strengths in areas such as aerospace, defence, and medical technology.

Agribusiness and Food: South Australia is a major producer of high-quality food and
agricultural products, including wine, grains, and livestock. The state's focus on value-adding,
sustainable practices, and export promotion is driving growth in this sector.
Tourism: South Australia offers a diverse range of tourism experiences, from stunning
natural landscapes to vibrant cities and cultural attractions.

Key Emerging Industries

Space and Defence: South Australia has a significant presence in the space and defence
industries, with several key players based in the state. The state's proximity to key defence
facilities and its growing space industry are attracting investment and creating opportunities
for collaboration.

Digital Technologies: South Australia is embracing digital technologies to drive innovation

and economic growth. The state is investing in digital infrastructure, supporting start-ups,
and developing a digitally skilled workforce.

Creative Industries: South Australia has a thriving creative industries sector, with strengths
in areas such as film, television, and music. The state's diverse cultural scene and supportive
government policies are attracting talent and fostering growth in this sector.

South Australia’s Key Strategic Partnerships

South Australia has fostered strong economic ties with a range of countries, forming
strategic partnerships that drive its economic growth and prosperity. China stands as the
state's largest trading partner, with bilateral trade exceeding $20 billion in 2022. This robust
relationship extends across various sectors, including mining, renewable energy, and
agribusiness.

Japan emerges as another key economic partner, particularly in the advanced manufacturing
sector. The two countries collaborate extensively in areas like aerospace and defence,
leveraging their respective strengths and expertise. This longstanding alliance has
manifested in significant Japanese investments within South Australia's economy.
Meanwhile, the United States plays a crucial role as a major export market for South
Australian agricultural products. Bilateral cooperation extends to agricultural technology and
food innovation, fostering advancements in agricultural productivity and sustainability.
Additionally, the defence sector forms a cornerstone of the US-South Australian relationship,
with the state hosting several US military facilities.

India, with its growing tourism industry, represents an expanding source of visitors for South
Australia. Opportunities for collaboration lie in cultural exchange and tourism infrastructure
development. Simultaneously, India's status as a significant importer of South Australian
goods and services suggests a burgeoning trade relationship. The United Kingdom, with its
strong education sector, stands as a valued partner for South Australia. Joint research
programs and student exchange agreements have fostered knowledge exchange and talent
development. Additionally, the mining sector benefits from a robust partnership with the
UK, with several British companies operating in South Australia.
Southeast Asia emerges as a region of focus for South Australia's economic expansion, with
trade, investment, and tourism forming the core of its engagement. The region presents a
growing market for South Australian goods and services, offering avenues for collaboration
in areas like education, infrastructure, and agribusiness.