beyond pt 0 23/1
beyond pt 0 23/1
beyond pt 0 23/1
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Other Sectors—cluster two<br />
The industries in the second cluster are not directly impacted by<br />
e-commerce in the modelling exercise, but are affected nonetheless by the<br />
flow on effects that reverberate through the economy.<br />
Exhibit 4.4<br />
Industry/sectoral impacts: cluster two (% deviation from base case)<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
-1<br />
-2<br />
ownership of dwellings<br />
construction<br />
all government<br />
agriculture<br />
electricity, gas<br />
and water<br />
chemicals, petroleum<br />
and coal products<br />
basic metal products<br />
mining<br />
-3<br />
1997<br />
1998<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
2012<br />
2013<br />
2014<br />
2015<br />
2016<br />
paper and printing<br />
TCF<br />
Source: MONASH model results.<br />
Flow on effects positively impact some sectors. Increases in productivity<br />
and real wages have dual effects of freeing up additional investment and<br />
improving consumer confidence, both of which positively impact, for<br />
example, upon construction and ownership of dwellings. Additional<br />
economic activity generates greater government revenue and the public<br />
sector expends in line with activity at large.<br />
Many of the industries in cluster two, however, are not affected positively.<br />
Real appreciation of the exchange rate negatively impacts upon many<br />
commodity sectors, such as mining, metal products as well as import<br />
competing sectors such as TCF. Commodity exports become relatively<br />
more expensive abroad and others face greater competition domestically<br />
from relatively cheaper imported goods. The exchange rate appreciation<br />
is caused by real wage increases that arise from e-commerce related<br />
productivity gains in the rest of the economy.<br />
Many of the export commodity sectors recover as the real exchange rate<br />
eventually returns towards the base case trajectory. This is the case for<br />
basic metal products and chemicals. The exce<strong>pt</strong>ion is mining. This largely<br />
reflects a sustained decline for black coal. Relative to other major mining<br />
activities black coal spends very little on intermediate inputs and therefore<br />
obtains no benefit from e-commerce while other sectors do. Black coal<br />
accounts for an increasing proportion of mining activity at large in the<br />
base case forecast and so the sector at large sustains a contraction.<br />
In the agriculture sector, industries producing export commodities<br />
(e.g. wool, grain and meat) perform poorly relative to industries<br />
producing food for the domestic market or inputs (e.g. grapes) used in<br />
emerging export products. This is because, as explained above, exports<br />
are harmed by real appreciation. Agriculture recovers strongly following<br />
abatement in the appreciation of the exchange rate.<br />
The impact on occupations<br />
The structural change in the composition of Australia’s industry brought<br />
about by greater use of e-commerce will also change the demand for<br />
28