Accounting firm Deloitte has identified what it calls the “Fantastic Five” growth opportunities for Australia in the future.
Deloitte says that since 2005 Australia’s growth has been fuelled by “lots of stuff that fast-growing Asia wants”. It’s not the first time this has occurred, with demand for gold, wool, wheat, iron, coal and nickel all booming at some stage.
Going forward, Deloitte says the five sectors for the next wave of growth are:-
- International Education
- Wealth Management
All these sectors are expected to grow significantly faster than global gross domestic product (GGDP) over the next 10 to 20 years. The above five are expected to each grow more than 10% faster than GGDP, and offer us a way to diversify as the resources boom slowly recedes.
Deloitte has also identified five big-picture advantages running in Australia’s favour:
- World class resources in land, minerals and energy
- Proximity to the world’s fastest-growing markets in Asia
- Use of English, the world’s business language
- A temperate climate
- Well-understood tax and regulatory regimes
So let’s have a look at some of the companies in those sectors that could benefit.
Tassal Group Limited (ASX: TGR) farms salmon and with natural fish stocks declining, the company could be at the forefront of delivering tonnes of fish to Asia.
Australia is expected to pass Qatar as the world’s leading exporter of gas within the next decade. Santos Limited (ASX: STO) is perfectly place with interests in two giant Liquefied Natural Gas (LNG) plants, acreage and producing assets in some of our most prospective oil and gas regions and expertise in unlocking unconventional gas fields.
Plans by James Packer’s Crown Resorts Ltd (ASX: CWN) to open a VIP high roller casino and six star hotel in Sydney is directly aimed at attracting wealthy Asian gamblers to Australia. Crown has the only casino in Melbourne and is reportedly interested in developing a new casino in Brisbane.
Teaching foreign students is Australia’s fourth biggest export earner and Navitas Limited (ASX: NVT), which provides education programs both to local and international students, is in the thick of it. Demand for educational services is expected to soar, with Chinese and Indian students dominating.
With our superannuation system ranked third in the world (Mercer Global Pension Index), Australia also has the fourth-largest asset pool in the world – expected to reach $7.6 trillion by 2033. Deloitte says our savings model is 15-20 years ahead of those by most other developed economies. That could see us well placed to advise and sell products into the emerging Asian pension industry. Challenger Ltd (ASX: CGF) could see strong demand for its annuity products, as well as life insurance and funds management.
When you consider the massive opportunities Australian companies have to service the growing Asian economies and their middle-class consumers over the very long term, some of our companies have the potential to grow into world-leading businesses – benefitting shareholders along the way.
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Motley Fool writer/analyst Mike King owns shares in Santos. You can follow Mike on Twitter @TMFKinga